Speed Read

'I was financially healthy and emotionally bankrupt,' says Harvard MBA: How 'joy-based spending' helped her feel rich and happy

Illustration by Elham Ataeiazar

Despite being financially well-off, many Americans feel they don't have enough money

One in four people who earn at least $175,000 a year describe themselves as either "very poor," "poor," or "getting by but things are tight," according to a recent Bloomberg survey of 1,000 Americans

This incongruence between salary and happiness might be the product of spending money on all the wrong things, says Manisha Thakor, author of the recently released book "MoneyZen: The Secret to Finding Your 'Enough.'" Thakor is a certified financial planner who has a Harvard MBA. 

She also experienced this first-hand, working a career in investment banking. 

"It wasn't like I was trying to live a private plane, Bugatti, Aston Martin lifestyle," she says. "The money was always about the freedom to get away from any situations that I felt uncomfortable in."

Ultimately, her behavior became "toxic," she says. 

She was fiscally responsible, but missed birthday and bachelorette parties. She got a divorce because, "having a spouse who is never around and always focusing on work is not pleasurable for the other party," she says. 

"I was financially healthy and emotionally bankrupt," she says. "My value as a person was my net worth, which is a really sick way to look at things, but I think a lot of us in finance do."

She decided she needed to restructure parts of her life in order to make it so her income was buying her at least some happiness. 

There are three tools, which she describes in her book, that have helped her embrace what she calls "joy-based spending." 

1. Conduct a joy audit 

Write down everything you spend money on for a month, and then highlight the transactions that didn't bring you joy. 

Most people will highlight things like utility bills, but you'll probably also find that you are spending money on non-necessities that also don't bring you joy. 

"It might be going out to an expensive lunch with colleagues where you gulped down everything so fast, you didn't even enjoy it," she says. "Or, you feel as a parent you need to take your kids soccer lessons and they hate the soccer coach and you hate driving them there. Cut those expenses and allocate toward things that bring you joy." 

I was financially healthy and emotionally bankrupt
Manisha Thakor
author of MoneyZen: The Secret to Finding Your 'Enough'

2. Do an hourly wage test 

Your time costs money, literally. You exchange your time and work for a salary every year. A good way to decide whether certain activities are worth your time and money is to see if they are worth the number of hours it takes for you to pay for them. 

"If you're making $60,000, divide that by 2,000 and you're making $30 an hour before tax," she says. "Now, if you see something that costs $300, you can do the math and ask yourself, 'is that worth 10 hours of my time?' There isn't a right or wrong answer. You decide." 

3. Utilize the power of the pause 

It's natural to feel like you want to buy things all the time, as we are constantly being marketed new products and experiences. 

Instead of clicking the "purchase" button on your phone, take a screenshot and wait, Thakor says. 

"Stick it in your shopping cart for a week, or if it's a real life store take a photo," she says. "Give yourself some space."

This can cut down on impulse buys.

Even if these tools don't curb your spending as much as you imagined, they will help you feel better about where your money is going. 

"I'm not saying deny yourself stuff," Thakor says. "I'm saying know yourself well enough that you are maximizing, that you are squeezing as much joy as possible out of every one of your hard-earned dollars." 

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