As the new year begins, now is an excellent time to step back and reflect on how you can improve your relationship with your finances, reduce financial stress, and increase your overall happiness.

There are many ways individuals can improve their relationship with their finances. They include using money to cultivate positive experiences and feelings, finding clarity around goals, and building financial resiliency.

Using Money to Cultivate Positive Experiences and Feelings. Studies show that as our income rises, our happiness increases, but only up to a point. Once you have “enough,” even sizable wealth increases add little to your overall happiness. So having more money doesn’t buy happiness. What does? The answer may lie in the emerging field of positive psychology. One of the underlying theories in this field identified five key elements of happiness. These five elements include cultivating positive emotion, increasing engagement, strengthening relationships, finding meaning, and achieving accomplishments (PERMA). When these elements are pursued for intrinsic reasons, evidence suggests this leads to increased feelings of happiness. How do we apply these findings in our daily lives? When we take stock of our day-to-day financial life. It’s helpful to identify how or if we’re using our wealth to increase the elements of the PERMA model in our life. Or are our financial decisions taking time and energy away from these elements? After you’ve taken stock of areas of your life that lead to positive or negative feelings, look for ways to prioritize your spending to boost the favorable elements while minimizing the negative ones.

Finding Clarity Around Your Goals. Setting goals is one of those things that people seem to cringe at. Setting goals can be challenging and does require some self-analysis and work. However, it isn’t as hard as people perceive it to be. One of the simplest and easiest ways to set goals is to get very clear about your values. Once you’re aware of your values, develop a list of tangible experiences or achievements you can pursue that bring you closer to living in alignment with these values. For example, if travel is a strong personal value, think about how many trips a year you’d like to take and attach a realistic cost to these trips. Next, make it a priority to use your financial resources to achieve this goal. Once you’ve prioritized and completed tangible actions in pursuit of your goal, congratulations, you’ve linked a goal to a value.

Building Financial Resiliency. One way to check your financial resiliency is to assign your readiness to handle unexpected financial issues from one to ten, with one wholly unprepared and ten completely ready. Anecdotal evidence suggests those that rate themselves a five or better express greater satisfaction with their finances than those with a lower score. Additionally, financially resilient people tend to focus on things they can control, such as savings rate and paying down debt, rather than what is beyond their control, such as stock market returns. Finally, cultivating an attitude of financial gratitude also builds financial resiliency. Spend time taking stock of all the positive things that money and wealth allow you to do. At the same time, focus on the good things you have now versus those that you don’t. Practicing financial gratitude provides a refreshing perspective and lets us see how fortunate we truly are.

As 2022 begins, take a few moments to reflect on the ways you can use your money to cultivate positive experiences and feelings, how you can gain clarity around values and goals, and how you can build financial resiliency. Remember, you don’t have to have it all figured out when it comes to your finances. Be kind to yourself. Even so-called “experts” make financial mistakes, and remember, 2022 is a new year and an opportunity to reimagine your relationship with your finances.