Conventional wisdom says to use your tax return to pay off debt or add to your savings, but psychologists say it’s also acceptable to use a tax return to invest in your own happiness.
“When people get a tax return, it’s seen as a bonus and it can feel like an even bigger bonus when people decide to invest it in themselves,” says Maya Weir, clinical psychologist and founder at Thriving California, a private practice in Napa, Calif.
Don’t limit your thinking about money to just saving and investing, says Annie Cole, EdD, founder and money coach at Money Essentials for Women in Vancouver, Wash. “If you’re already meeting the mark when it comes to finances, paying down debt, putting extra cash in saving and covering your expenses, then the next thing to do is explore how surplus money can impact your life,” she says.
Cole recommends making a bucket list of what you would do if you had extra cash to spend. However, she warns against simply making a list of expensive items to buy. Instead, she recommends focusing on ways to spend money that will either create a long-term memory such as a trip or a special dinner or will improve your life such as joining an upscale fitness center that offers yoga and meditation if you’re into wellness.
Jenny Mahlum, an integrative psychotherapist at New York Counseling in Manhattan, agrees that if you’re looking to invest in your happiness, it’s best to focus on novel experiences rather than accumulating items. “While we might momentarily get a burst of joy when wear a new sweater or drive a new car, eventually the novelty tends to wear off and you stop appreciating the experience of the item you just bought,” Mahlum says. In comparison, a novel experience can create a new memory.
Here are five unique ways to use your tax refund to invest in your happiness.
1. Take a class or workshop that would give you skills to generate side income or help you get a promotion.
Learning a new skill can increase your sense of accomplishment and confidence, and that could contribute to feelings of happiness, Mahlum says. She recommends framing this purchase as an investment in yourself and align it with your values and a larger sense of purpose rather than seeing it as a means to earn more money so you can buy an extra sweater or handbag.
