The events of 2020 have highlighted the large impact financial stress has on our mental health and overall wellbeing, and just how fragile Australian’s finances are.
If you are fortunate to receive a tax refund (or any other windfall) in 2020 following are 7 of the best ways to get the most bang for your buck.
I’ve long sensed that just like certain foods nourish your body better, certain spending better nourishes your soul.
Research on money and its influence on happiness and wellbeing is still a relatively young field with much yet to be explored. From what I’ve read I sense the following hierarchy emerging.
Secure your wellbeing
Feeling financially stressed so persistently detracts from our wellbeing that it outweighs the buzz from any pleasurable purchases.
If you’re worried about money then use your tax refund to cover the basics and secure a baseline of wellbeing.
- Seed your infrequent commitments account. (Unforeseen expenses blow many people’s budgets and cause stress.)
- (Re)build emergency savings (it could happen to you)
- Repay high-interest consumer debt
- Get on track to afford life goals that really matter to you. (Missing out is stressful.)
Boost your wellbeing
Once you’ve covered the basics, spending money on shared and shareable experiences appears to provide the most joy, according to the research.
You get the most buzz per dollar by planning in advance (anticipation), sharing the experience with loved ones, relating the story to others and then again by reliving the experience through photos and memories.
Combine connection and contribution to make the most of your tax refund in 2020. For example:
- Make a meal or buy & deliver some essentials for a friend who’s been affected by recent events
- Shout a friend to an experience you do together. (e.g. picnic, night out, or a movie.)
- Share an experience with your family.
A holiday is a common example of a shared experience, but if your tax refund doesn’t stretch that far, an activity like ice skating or bowling works. One school holidays, my kids and I booked a buffet breakfast at a fancy hotel and we still ‘dine out’ on that memory.
- Gilovich T, Gallo I. Consumers’ pursuit of material and experiential purchases: A review. Consum Psychol Rev. 2020;3:20–33.
- Aknin LB, Wiwad D, Hanniball KB. Buying well?being: Spending behavior and happiness. Soc Personal Psychol Compass. 2018;e12386.