Following a budget, saving money and shopping less have benefits "beyond the realm of personal finance," according to a new study out of the University of Arizona.
Millennials who implement "proactive financial strategies" tend to be happier and more satisfied with their lives, according to the new research.
For the study, researchers collected data from 968 young adults (born between the years 1981 and 1996) starting when they were freshmen in college (ages 18-21). They followed up with the same students when they were seniors, and then two years later (ages 23-26).
The study participants answered questions about materialism, their own personal finance tactics such as budgeting and any pro-environmental habits they followed. (The researchers chose to look at eco-friendly habits because they provide further insight into how the students "cope with limited resources.")
Students were also surveyed about their mental health, including their how satisfied they were with their lives and how they'd rank their personal well-being.
"People who save money report better overall well-being, including less psychological distress," Sabrina Helm, study author and associate professor tells CNBC Make It. "And people who buy less and consume less show less depressive symptoms, so there's a positive mental health effect."
Not surprisingly, the money-saving strategies improved people's financial satisfaction too.
"It gives you peace of mind," Dr. Helm says. "If you're able to put something aside for worse days, and if you manage to live within your means, it has clear positive effects on mental health." This finding is especially significant for students, "who very often have a hard time financially," she adds.
Certain sustainability efforts also have a similar impact on people's health and happiness.
For example, researchers found that the students who consumed less to help the environment were happier than those who simply bought more "green" products. Although many people have been socialized to see products as solutions, simply reducing the number of things you use or buy might be the better strategy for your mental health, Dr. Helm explains.
"It's normal to get a product to help us cope with all sorts of things in our lives," Dr. Helm says, "but that contributes to climate change."
Luckily, there are concrete tips people can use to "step back from the consumerist approach" and feel happier with their lives, Dr. Helm says. For example, she suggests keeping a weekly purchase diary and creating a shopping list to avoid spending on impulse.
"If we can manage to take a more critical or mindful stance toward our everyday consumption behaviors, that'd be extremely important," Dr. Helm adds.
People in other age groups can benefit from scaling back, not just young people in college. A 2014 study found that adults who are less materialistic tend to be happier (on the flip side, people who are happier also tend to be less materialistic).
Don't miss:
Like this story? Subscribe to CNBC Make It on YouTube!