By Mohammed Aiyedogbon
As many households continue to watch their budgets, “joy-based budgeting” has become a more positive and realistic way to manage their money. Instead of focusing only on cutting spending, this approach encourages people to spend intentionally on the things that matter most to them.
Joy-based budgeting helps consumers prioritize purchases and experiences that bring real value while cutting back on expenses that don’t. Data from a recent Bank of America survey indicates that last year, lower-priced discretionary retail and service categories like big box stores, secondhand and novelty stores saw spending growth, while customers pulled back on bigger ticket services.
Need some advice on ways to bring balance and enjoyment to your life while still working toward your financial goals? Here are some joy-based budgeting tips to help:
Define what brings you joy: Align your spending and saving with what truly enriches your life. Start by reviewing your past spending to identify your “joy” spending categories — experiences, specific hobbies, or dinners with loved ones. Then, use the 50/30/20 budgeting framework: allocate 50 percent of your after-tax income to cover needs, like rent, 30 percent to wants (including your “joy” spending categories), and 20 percent to savings. By consciously directing 30 percent toward what truly matters to you, you’ll balance spending that serves your long-term happiness with savings.
Embrace strategic sacrifices: Cultivating strong financial well-being often means making intentional trade-offs. Bank of America found that 86 percent of consumers are cutting back on discretionary spending, and the key is adopting a “save-for-it” rather than “do-without” mindset. Cooking at home more often or streaming entertainment instead of going out means more savings to redirect toward purchases that align with your values.
Maximize joy spending with strategic rewards: Once you’ve identified your priority spending categories, choose a credit card that rewards you accordingly. For example, the Bank of America Customized Cash Rewards currently offers 6 percent cash back for the first year after account opening (up from 3 percent cash back) in one of six categories of choice each month. This card also allows you to switch your category of choice once a month to align with where you’re spending most.
Automate your emergency fund: Building an emergency fund can feel daunting. In fact, 32 percent of Americans find it to be the most challenging aspect of managing their money. Make it effortless by setting up automatic transfers from each paycheck to build three to six months’ worth of living expenses in a dedicated fund. A solid safety net reduces financial anxiety and strengthens your financial well-being — giving you the confidence to spend joyfully on what aligns with your values.
Get ahead on tax preparedness: Establish financial peace of mind by gathering tax documents early. This year, there’s extra incentive: BofA Global Research estimates that refunds in 2026 could be about $65 billion higher than 2025 — a rise of 18 percent. Proactively collecting W-2s, 1099s and other necessary forms now means less stress as tax day approaches and more clarity around your financial picture year-round.
Financial well-being doesn’t mean giving up the things that bring you happiness. With thoughtful planning and intentional spending, joy-based budgeting can help you stay on track to meet your goals while still making room for the moments and experiences that make life meaningful.
— Mohammed Aiyedogbon is vice president of consumer banking market leader for Bank of America Memphis.
