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International Day of Happiness – which falls on 20 March 2026 – was established by the United Nations (UN) in 2012 to recognise happiness and wellbeing as fundamental goals for everyone.
While you might think that financial planning is more focused on goals such as building wealth and financial security, your happiness has an important role to play.
Findings from one of the longest-running studies on happiness by the Harvard Study of Adult Development, reported by Reuters, reveal a strong link between emotions and wealth. By tracking people since 1938, the researchers have discovered that money can be a powerful tool for building a sense of security, safety, and control – all of which may contribute to greater happiness.
As such, balancing your wellbeing needs with your money goals could allow you to create a meaningful financial plan that helps you build the life you want.
Keep reading to discover four compelling reasons to put happiness at the centre of your financial plan.
1. Clarify what really matters
Using happiness as your starting point for financial planning encourages you to think about what really matters.
Without this focus, your goals might be vague, such as “save more”, and you may default to setting goals based on what you think you “should” want out of life or what you see others doing.
Asking yourself the following questions might help you clarify what happiness means to you:
- What does my ideal day look like?
- Which relationships bring me the most joy and fulfilment?
- Which values are most important to me – freedom, security, generosity, or something else?
- When you look back on your life, what will make you most proud and content?
2. Reduce financial anxiety and boost your wellbeing
According to a 2025 survey by WeCovr, 43% of UK adults reported that money worries were significantly damaging their mental wellbeing. This is the highest figure on record and represents over 22 million people.
This may be partly due to the persistent cost of living crisis, which is putting financial pressure on many households and businesses. Figures published by the Office for National Statistics (ONS) show that UK inflation rose by 3.4% in the year to December, up from 3.2% in the 12 months to November. Moreover, the rate of inflation has remained above the government’s 2% target for most of the period since early 2021.
If you’re experiencing money-related stress and anxiety, putting a plan in place that combines financial security and wellbeing could provide valuable certainty and peace of mind.
What’s more, focusing on what makes you happy and creating a clear roadmap for achieving your goal may help you tune out the noise of external factors, such as rising inflation and interest rates, and give you a sense of control.
As such, happiness-focused financial planning could provide a major boost to your mental health and wellbeing.
3. Work out how much money is “enough”
One of the most quoted lines from the American businessman and philanthropist, John D. Rockefeller, is, “How much money is enough? Just a little bit more”.
No matter what your circumstances are, it’s natural to want more money. Indeed, accumulating and growing wealth may boost your wellbeing by providing financial security, freedom, and enhanced life satisfaction.
According to the mental health app, Ahead, hitting money milestones fuels the brain’s reward system and releases dopamine (the “happy hormone”).
However, endlessly chasing “more” with no end-goal in sight could lead to overworking, over-saving, and underspending on things that really matter. All of which could negatively affect your wellbeing.
In contrast, planning your financial goals around what makes you happy could help you calculate how much is “enough” to achieve your version of a good life – rather than continually chasing a moving target.
4. Boost your motivation to pursue long-term goals
Sticking to your financial plan over months, years, and decades can be challenging. If your goals don’t feel meaningful, you might be tempted to abandon them in favour of shorter-term priorities.
On the other hand, if you explicitly link key financial milestones to the things that make you happy – time with family, travel, an early retirement, and so on – this could keep you motivated over the long term.
Get in touch
If you’d like help creating a financial plan that puts your happiness at its centre, we‘d love to hear from you.
To learn more, please email hello@sovereign-ifa.co.uk or call us on 01454 416653.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
Approved by Best Practice IFA Group Ltd on 19/2/26