The Exact Amount to Maximize Happiness

I started writing this post over three weeks ago, and right smack in the middle of it I got the call that we were gonna have the baby the next day. I had to stop writing it, of course, against my hustling nature (though I did sneak on to share the 2-week early surprise! ;)), but interestingly enough I’ve thought about this article almost every day since.

You might not find the idea as mind blowing as I did, but I really wanted to share it with you on the off chance you do. And hopefully it creeps into your mind and sets up camp for a while too! There could be worse things stuck in there, haha….

It all came from this paragraph I read over at

My fundamental belief about spending is not that we should all spend as little as possible. It’s that we should spend the exact amount to maximize our own happiness. No more and no less. So if a purchase is not worth the freedom that it will cost, that’s when I’m apt to choose to say “no.”

BAM! The “exact amount” to maximize our own happiness. Love that.Imagine if every dollar that leaves your wallet goes towards some form of happiness?? And *efficiently*?

Well, it could. And I bet you’re already doing this to some degree without even realizing it. In fact, I started thinking about past experiences/purchases of my own throughout time and it started to sink in even more. For example….

I. My Car

A cherry red Cadillac DeVille over 20 years old. Some see it as a luxury car (those double my age), while others see it as straight up ghetto (people my age ;)) but it’s the perfect concoction of what I desire out of a car. Something that gets me from A to B, but just as important something that makes me feel GOOD driving around in. And guess what? A Benz or Rover could do the same thing too! Which is exactly why people splurge so much on them, and why I don’t have a real problem when they do so as long as it fits within their priorities and financial game plan. Fortunately for me, however, I gain just as much joy pimpin’ around in my Caddy that cost me a whopping $3,000 as I would a ride at $60,000 :)

That’s what “maximizing your money* is about. Spending just the right amount to reach your joy level without going overboard and having the ratio flip flop on you (ie, like if I had picked up a new Rover instead of the Caddy). Two things can being you the same amount of happiness, but you go with the one best for your wallet :)

II. Entertainment

There are a LOT of different ways to spend your money to entertain yourself every day/weekend, but a lot of things can cost you INCREDIBLY less for the same amount – if not more – of happiness. Like hanging out with friends or going for walks, or even road tripping! A cruise or a night out at the club drinking yourself to oblivion can also be loads of fun (believe me, I know!), but the trade off with money just gets much much crazier in that regard. But of course it’s not bad to splurge every now and then either – you just need to keep it all in mind and realize “fun” comes in many (cheaper) varieties too. It’s all about the perfect concoction of money and happiness!

III. My Hair

As many of you know, I rock a mohawk. It requires exactly one pair of scissors, a set of shaving clippers, one bottle of hairspray (not to be used all at once!) and a beautiful wife who cuts it for me each and every month for free :) Now could it be even sexier if I took myself to a professional who could really jazz it up some more? Or, God forbid, give me a cool adult hair cut? Possibly. But again, why spend more money for not that much more return? Especially when you’re perfectly happy with the way your darling significant other works it? (Thanks honey! Except for that one time you clipped one of my spikes right before our wedding, but I’ve totally forgotten about that, don’t worry…. ;))

IV. My Clothes

Jeans, t-shirts, hoodies. The perfect combo :) I have to have suits and other things in the wardrobe for the special occasions, but all my money that goes into clothes (which is almost zilch at this point and they’re falling apart!) is on those three staples there. Because over time I’ve whittle it down to the bare necessities to keep me un-naked and smiling. I could be even happier with $500 jeans and $100 tees instead of $30 and $10 ones, but not significantly more so I stick to the TJ Maxxes and “max”imize my savings (you see what I did there? Or wait… was that their marketing strategy the whole time and I’m just now catching on?? Haha….)

V. My House

Now 7 years ago I was doing the OPPOSITE of finding the perfect mixture of happiness and money by splurging on a $360,000 house which I shouldn’t have done, but nowadays I’ve got my mind on straight and when it came to move we chose as close to the perfect house as we could. An historic-y single family home within the city, but not too far in, with just the exact # of bedrooms we needed. Nothing more, nothing less. We could have gotten a place smack dab in the middle of downtown which would have been a dream as far as I’m concerned, but again the $$$ didn’t justify the jump in happiness. How much more joy would I get out of living blocks closer to coffee shops for the drastic bump in pay? Not enough for us to sign on the dotted line, I’ll tell you that.

VI. My Wife

Now I could have scored a supermodel with millions and millions of dollars, but…. YEAH RIGHT I’M GOING THERE!!! Haha… my wife is perfect and she didn’t cost a thing, thank you very much ;) I had you there for a second though, didn’t I?

So. All this to say that your MENTALITY with happiness is key here with money. And the more you can keep this in the back of your head, the more money you’ll have to put to work elsewhere. Like, say, paying off your debt or investing in your retirement accounts, etc etc. Sometimes you can’t get around paying high amounts for stuff that’s important to you, but most times there’s a nice alternative that does the same trick for much less.

And that’s really the point with all this today – you gotta do your best to maximize your happiness for the least amount of money. The perfect concoction. I bet most of y’all are already doing this too! Think about it for a few and then share with us down below…

What are you doing well, and what could you be doing better? How much joy are you actually GETTING from your things??

PS: In case you’re wondering why I keep bringing up my wife, I want to see if she still reads this blog ;) Unlike us she hates all things money, so I’ve got to find a way to keep her attention!

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  1. Clarisse @ Savvy Scot May 21, 2014 at 6:06 AM

    Good job J. Money, I think your wife would get her attention for this post. :) I would have a splurge this weekend, I’m going to treat my family and some relatives to my post birthday celebration, yay! We are going to have a night swimming in one private resort here in our place.

    1. J. Money May 21, 2014 at 11:46 AM

      Well that sounds sexy!

  2. Dee @ Color Me Frugal May 21, 2014 at 6:47 AM

    Great point, that’s really what money is for isn’t it? They say that money can’t buy happiness, but if you spend your dollars wisely you can wind up pretty happy! Right now we are spending lots of money on our upcoming adoption, which we think and hope will bring lots of joy down the road! We’ve sort of stopped buying most “things” lately because this is what we really want (and it’s expensive!)

    1. J. Money May 21, 2014 at 12:10 PM

      Awww that is wonderful!! I can’t even imagine how expensive that is (which is crazy since so many people give them up and/or *gasp* get rid of them!), but I pray so bad it works out for you all and will keep you in our thoughts :) Babies are awesome!

  3. Mr. Grump May 21, 2014 at 6:59 AM

    I have been thinking about this lately as well. The thought occurred to when I realized the happiest person I know is also one of the poorest but they are never in a bad mood and always welcome you with true happiness. So many other “rich people” truely are the poor among us.

    1. J. Money May 21, 2014 at 12:33 PM

      Agreed!! Sounds like your friend has figured out life pretty well :) Besides the money part, haha

  4. Dave @ The New York Budget May 21, 2014 at 7:58 AM

    So I am ALL about maximizing happiness. I think there is one more factor though. You can spend the exact amount that makes you happy, but I believe that every once in a while (maybe once in a lifetime, maybe never for some), you can go through a transformation and SHIFT what level of spending makes you happy. This is different from lifestyle inflation where people just aren’t being conscious about their spending. If you life goals change dramatically, this shift can occur.

    1. J. Money May 21, 2014 at 12:42 PM

      True true… Perhaps like how I now would spend $20-$100 on an old rare’ish coin as a hobby vs before when I could care less? And my money was going to alcohol instead? ;)

  5. Stefanie @ The Broke and Beautiful Life May 21, 2014 at 8:10 AM

    I hate knowing I can get something for less, so I’m all about figuring out what my exact number is before buying things. Just last week I got a super high end bumble and bumble haircut for free. Thank you craigslist!

  6. Mike Collins May 21, 2014 at 8:44 AM

    It’s all about balance J. Some people go overboard and spend more than they can afford to impress people and live an unsustainable lifestyle. Others refuse to spend a dime and are content with eating boxed mac and cheese 5 nights a week to save money. To me, you’ve just got to set your priorities and spend money on things that make you truly happy while eliminating all the fluff. Good post man.

  7. John @ Sprout Wealth May 21, 2014 at 9:17 AM

    Lol, Love the P.S. J! I do the same thing with my wife and since she’s my editor it’s pretty easy to see if she’s paying attention. That said, great post man. I’m all about spending the amount that brings me happiness. It’s going to be more on some and less on others, but that’s the beauty of having a plan, you can adjust things so as to you can have what you need or want and still relatively be happy.

    1. J. Money May 21, 2014 at 4:37 PM

      Can your wife please talk to my wife? :)

  8. Holly@ClubThrifty May 21, 2014 at 9:28 AM

    I like to think that we’re spending our money according to our values and what makes us happy. I don’t care much for material possessions, only experiences!

  9. E.M. May 21, 2014 at 9:30 AM

    I do try to get the most out of my purchases. I see too many little things laying around our apartment that haven’t been used, and I think of all the money that’s been wasted on them. I’ve been analyzing my purchases for the past year to prevent that from happening further, and I’m happier!

  10. maria@moneyprinciple May 21, 2014 at 9:36 AM

    Yeah, we’ve been following a similar pattern with few exceptions. I really good (and expensive haircut) not only maximizes my happiness (I can flirt outrageously with my hairdresser who is a very attractive man) but also has a positive effect on my bank balance. I am also changing slightly the clothes thing – as we say in Manchester ‘I’m scrubbing up’. I just figured that there come an age when scruffy is not cool any longer; just scruffy. Oh, and my husband is lovely and high maintenance :) (just kidding).

    1. J. Money May 21, 2014 at 4:38 PM

      I can appreciate that :) And I’m sure John does too! (except for your last comment, haha… I’m totally sending it to him)

  11. Jen @ Jen Spends May 21, 2014 at 9:54 AM

    This is a great way of looking at things. Sometimes I am perfectly happy with inexpensive options, but other times settling for less has actually undermined my efforts at saving. If I buy something I really hate, or that just doesn’t work for me, it’s only a matter of time until I cave and spend more money to get what I really wanted anyway. Happiness is very important, because otherwise your efforts at saving will be unsustainable longterm.

    1. J. Money May 21, 2014 at 4:40 PM

      Yup!! I’m over buying crap stuff fully knowing I’m gonna go for the higher end stuff down the road anyways. Best to get the nice thing right away and be happy and confident from the start. As long as you have the money and it’s a priority or SUPER want, of course ;)

  12. Becky @ RunFunDone May 21, 2014 at 10:08 AM

    I think this is exactly right! I think I keep a nice balance, and sometimes I feel kind of criticized on either end. For example, the Mr Money Mustache crowd would think I’m crazy for going out to eat sometimes and for taking international vacations every year. Meanwhile, my friends think I’m crazy and depriving myself because I won’t go out to expensive restaurants and don’t splurge on expensive girls’ weekends. In reality, I feel like I have a pretty nice balance of saving a good amount of my income for the future, paying down the mortgage a reasonable amount, and still having money to splurge on the things that I value.

    1. J. Money May 21, 2014 at 4:41 PM

      Haha yeah – there are definitely some extremes on both sides :) That’s why it’s important to KNOW yourself and be confident in your plan/goals so it’s easy to brush either side off and continue doing you. Which it seems like you’re doing great :)

  13. Nicole May 21, 2014 at 10:33 AM

    I couldn’t agree more with all of this! I feel the same way. I get cheap haircuts and have my husband dye my hair because it’s much cheaper than the salon and I feel just as happy.

    My only issue is sometimes I don’t do something I know would be fun because I don’t want to spend the money. It’s a balancing act for sure.

    1. J. Money May 21, 2014 at 4:43 PM

      Yeah, you def. have to say “yes” every now and then or you can fall into the extreme saving route and miss out for sure. But it seems like you’re pretty cognizant of that already which is good :)

  14. Brian @ Debt Discipline May 21, 2014 at 10:36 AM

    I think it about balance. For us we want to have the freedom and the cash to take the trip if we want when we want and not have to stress out about it. There have been a lot of “no’s” along the way of paying off our debt so it will be nice to have have to say that every time the family is looking to do something.

  15. Zee @ Work To Not Work May 21, 2014 at 11:09 AM

    Sometimes you get good value for whatever your purchase. Getting a dog was not spending the exact amount of money to maximize happiness, it was the deal of the century. That little furball was one of the best values ever.

    But other times you unintentionally waste money on say, going to a bad movie that you thought you wanted to see but ended up sucking.

    1. J. Money May 21, 2014 at 4:44 PM

      I think your dog is a PERFECT example of “exact spending for happiness!” I don’t know how much he/she cost, but whether he/she was $1.00 or $1,000 you’re obviously happy so the price was right!

  16. Big Guy Money May 21, 2014 at 11:11 AM

    Thanks for the smile this morning J :)

    On the clothes thing – I’m exactly the same way. T-shirts, hoodies, jeans, and a hat. I had to go to a conference a couple weeks ago and spent about 15 minutes searching for pants other than jeans LOL. If I ‘dress up’ for church, you can bet I’m in shorts and a t-shirt 5 minutes after arriving home.

    1. J. Money May 21, 2014 at 4:45 PM

      I’m surprised you didn’t rock that at the conference :) I refuse to dress the part nowadays except for church (though I am still more casual than my mom would probably like, haha…).

      If you head out to FINCON this year you make sure to totally wear jeans and a tee! Or a hat! Bloggers don’t hate.

  17. Shannon @ Financially Blonde May 21, 2014 at 11:20 AM

    Ha! Well, the best advice given to my hubby at our wedding was “happy wife, happy life” and if not reading your blog makes her happy, then so be it. :-) I on the other hand, force my hubby to read mine but for the same reason. ;-) I definitely used to think that happiness resided in stuff and over the last three years, I have shifted my happiness extraction process and find tons of joy for minimal spending. It is definitely a mind game, though, and requires work, but the work pays off financially and emotionally.

    1. J. Money May 21, 2014 at 4:47 PM

      “happiness extraction process” – I like that :) And I’m actually not that against buying “things” per se, as long as they maximize happiness and they fall inline with your money goals. It’s only when they screw over your financials AND don’t deliver much of a value in the end. That’s a double whammy right there.

  18. Christine @ The Pursuit of Green May 21, 2014 at 11:57 AM

    It’s all so true! It all depends on what makes you happy and keeping it all balanced. I usually try to spend as little as possible but when it comes to new appliance or clothing I’ll splurge a little more to get better quality stuff that will make me happier and last longer too. Albeit I don’t spend a lot on clothes but when I do I spend a bit more. None of that once in the wash and it falls apart stuff, that’s just wasting money!

    I love how adaptable we all are too with resetting our minds and changing what we think is going to make us happy. I used to love fancy $100 dinners, now I’m perfectly happy with a $20 meal and $30 is a big splurge!

    1. J. Money May 21, 2014 at 4:49 PM

      Haha… I believe people call that “growing up?”

  19. Kathy May 21, 2014 at 12:24 PM

    I’m trying desperately to get out of the accumulation of money mindset and into one that says we have plenty of money so now go an enjoy some of it. We bought for cash a 5 year old Lexus with only 15K miles from a family member and I’m embarrassed to admit that I love driving that car. Not because it makes me feel superior to anyone else, but because it is just so darn nice. Most of my clothing is jeans and shorts or t-shirts but I do have a few nice dresses in my closet in case I attend a wedding or funeral. I do splurge on designer handbags once in a while, but I get ones whose quality allow me to carry them for 10-20 years. Most of our dinners out are in the $20-30 range except the one time a year or so that we go to Cheesecake Factory and then I absolutely have to get dessert! Now that maximizes my happiness…..limoncello crème torte….yum!

    1. J. Money May 21, 2014 at 4:51 PM

      Don’t be embarrassed with liking your car!! That’s the perfect situation! Especially for someone who has a problem “accumulating money” haha… That tells me already you’re obviously good with money so if anyone “deserves” a splurge it’s you :)

      You drive that bitch around and smile! (And honk at me if our beauties ever cross paths on the road ;))

  20. James / Free Spirit Finance May 21, 2014 at 12:57 PM

    Nice article J. I think you’ll know soon enough if your wife still reads the blog! LOL

    I ride a bike to my day job. Doesn’t get much cheaper than that. My haircut is a buzzzzzz with a beard trimmer. I can’t stand spending money on things like that. I’d rather have the $20 a haircut would cost to take my kids for ice cream.

    I’d say the house is also the 1 area that’s really not working for us. We spend a fortune, taxes are high – and I don’t even like living in a city. Could have spent this much for 50 acres in the country and a bigger house to boot.

    1. J. Money May 21, 2014 at 4:52 PM

      Yeah, unfortunately a lot of us suck at the housing part which is a shame since it’ THE BIGGEST PURCHASE of our lives :( But oh well – hopefully we know for the next time around and are smoother, right?

      1. James / Free Spirit Finance May 21, 2014 at 5:35 PM

        For sure. We have a 3-5 year plan to get out of this one, and now we know exactly what we want next time. :)

  21. Sam @ May 21, 2014 at 1:16 PM

    I think you’ve hit the right balance on the money vs. happiness debate. My guess is that at the risk of oversimplifying the balance, most people say you need to stop all your spending and save everything.

    For me, I’m enjoying saving — it’s actually making me happy. Moreover, the debt I used to have used to cause me severe heartache. Definitely feels better moving in this direction. :)

    1. J. Money May 21, 2014 at 4:53 PM

      That’s even better! Haha… A habit that actually makes you feel GOOD in the end :) If only all our habits were like that.

  22. Done by Forty May 21, 2014 at 5:04 PM

    I like the way it’s put in this article, J Money. Our purchasing decisions have an efficient frontier, of sorts, where we put in the right amount of money to get the desired result. There are a lot of options that will get us close to this, but they have varying costs & payoffs.

  23. Amy May 21, 2014 at 8:35 PM

    Great post! Some of the personal finance blog posts and books I read are so rigid in their approach, and I think it’s very important to find the right balance for oneself.

    1. J. Money May 23, 2014 at 12:51 PM

      Yeah, it’s hard to give advice on all this stuff really since it comes down to our own personal situations and personalities (and goals, dreams, etc). That’s why I love blogs so much – you can learn and read from handfuls of people all trying to get better :)

  24. No Nonsense Landlord May 21, 2014 at 11:14 PM

    There is definitely a balance, but I do not ever think you can have too much. I mean, if you win the lottery, will you only take what you need and give away the rest?

    Maybe you wont spend too crazy, but all the extra backup would be nice.

    1. J. Money May 23, 2014 at 12:54 PM

      Oh, for sure. Even once you have everything you need you can do so much GOOD in the world with tons more money! Even if you just donated it all or set up foundations/etc… The trick is just knowing that you have all you need and can be content :)

  25. Amanda @ Passionately Simple Life May 22, 2014 at 9:26 AM

    Ah efficiency! The bf always tells me that it’s okay to buy takeout every now and then after a unexpected long day at work or otherwise. I’d rather be saving all our pennies even if it means making dinner at midnight. There’s a point that money makes your life not only easier but better and knowing when to spend it is something I’m still working on.

    1. J. Money May 23, 2014 at 12:54 PM

      You can tell your bf I’m siding with him on this one :)

  26. debt debs May 22, 2014 at 12:06 PM

    Stuff is just clutter. I’m totally over it and moving towards a minimalist lifestyle. Does this mean I’ll never buy anything again? No way, but I will appreciate what I do buy all the more.

    My husband knows about my blog but I don’t know if he reads it. Sometimes I want him to and sometimes I don’t. I don’t push it. I share some pretty personal information and try to do it in a respectful manner. This doesn’t mean I won’t rail on him for laughs, though. A girls gotta have her fun!

  27. EL @ MoneyWatch101 May 22, 2014 at 1:57 PM

    Great post and yeah people should analyze their expenses to benefit their lives. What matter to others might not matter to me, and its a matter of opinion if what makes you happy is a Rolex watch you decide to purchase, while holding 20K of student loan debt. Many can’t send more than the minimum to debt because it makes them sad, but they can go out to eat and that makes them happy. It’s a dysfunctional mentality, but as bloggers we can’t judge.

  28. Crystal May 22, 2014 at 2:53 PM

    Great advice! We’re cutting back on our non-maximizing-happy spending big time so we can have lots of happy (travel) 3-4 times throughout the rest of the year.

  29. Michelle May 22, 2014 at 8:25 PM

    Something I’ve done well is finally purchase a quality vehicle that I will be keeping for 10 years and I know it will last that long, super happy about that. Not so well would be my clothing spend….way too much happiness and moolah going to that department! But I have been getting money back from all the old clothing I’ve purged – I love consignment!

    1. J. Money May 23, 2014 at 1:24 PM

      There you go!! I’m all about the “cycle of fun” as I call it. If you can find ways to make money to fund your splurgy habits, go for it! I do the same thing with coin collecting – I mainly only use money I’ve earned from selling previous coins or other things around the house. So basically getting rid of the stuff you don’t care about, and using the money to fill up the stuff you DO. No shame in that!

  30. Nate St. Pierre May 22, 2014 at 8:46 PM

    The one thing I love to do that costs a bit of money, depending on how I swing it, is driving cross-country. Well, I finally made the decision to buy a dependable car that’s not on the verge of breaking down, and now I can get out and hit the road anytime I want . . . even to see the good ol’ Money family! ;)

    First time I’ve ever had a car payment, but the freedom is worth it!

    1. J. Money May 23, 2014 at 1:26 PM

      That’s a great example, man. Though you know I still have to give you a hard time on the car and price tag :) It’s a good thing you rarely spend any money on yourself!

  31. Deasy Noel May 23, 2014 at 10:39 AM

    Thanks for this, I needed it recently as I seem to have forgotten about maximizing my money and just splurging it on random little things that adds up to quite a bit. Hehe…. Hoping to get back on track!

    1. J. Money May 23, 2014 at 1:26 PM

      Perhaps it’s these “little things” that excite you the most? That would be okay :)

  32. Allie Davis May 25, 2014 at 4:59 PM

    I think about this all the time! Literally in economics classes they teach that companies try to maximize profit and people maximize happiness. The problem is that most people are not very good at optimizing their money. Nice examples of how you’ve used this principal in your life.

    1. J. Money May 26, 2014 at 10:59 AM

      Yeah Econ! I’d have paid a lot more attention in those classes growing up if I knew what I knew now :) Back then I just wanted to get through it and be done, haha… So enjoy and soak it up!

  33. @freepursue June 5, 2014 at 8:31 AM

    What resonated most with me about your quote from MilesDividendMD was:

    “So if a purchase is not worth the freedom that it will cost, that’s when I’m apt to choose to say ‘no’.”

    It’s so powerful to think of it that way. Money is not money. For most of us who still work for a paycheque, it’s time and effort. Unfortunately, because one is mentally removed from the other, we don’t think of it that way…and credit cards are even more removed from the active effort required to achieve purchasing power.

    I like the Ultimate Cheapskate’s idea about keeping an hourly cost conversion in your wallet. What each price level would cost in hours of work (a net, all-in hourly rate).

    Buying that pair of shoes will cost me 5 hours of effort. Is it worth it? Better yet, what if I put the monetary equivalent of those 10 hours in long term savings instead and saved myself more of that life energy in the future? That pair of shoes just got even more expensive.

    That mohawk of yours just got more attractive, didn’t it…

    1. J. Money June 6, 2014 at 7:29 AM

      Haha, indeed ;)

  34. Crystal June 11, 2015 at 6:16 AM

    I am going on vacation . My quote for today is numbing my pain for the sake of Mary Jane! Smokeyalater Fbgm