The PERMA-V Model

In personal finance, PERMA-V is a positive psychology framework used to move beyond “surface-level” financial goals (like “saving for a house”) to uncover “deeper” goals tied to core life values and long-term well-being. Financial advisors use PERMA-V prompts to help clients allocate resources in ways that promote “flourishing” rather than just accumulating wealth. 

The acronym stands for six core elements of well-being: 

• P – Positive Emotion: Allocating funds for activities that bring immediate joy, gratitude, or optimism, such as concerts or hobbies.
• E – Engagement: Spending that allows for “flow”—the state of being fully absorbed in an activity. This might include investing in professional development or specialized equipment for a craft.
• R – Relationships: Prioritizing spending that builds or maintains social connections, such as family trips, dinners with friends, or gifts.
• M – Meaning: Aligning financial choices with a higher purpose or personal values, such as charitable giving or supporting local businesses.
• A – Accomplishment: Setting and funding goals that provide a sense of mastery or achievement, such as paying off debt or reaching a major retirement milestone.
• V – Vitality: Investing in physical and mental health, including expenses for nutritious food, gym memberships, quality sleep, and medical care. 

Advisors and individuals use these categories as prompts to audit their spending and saving: 

1. Goal Discovery: Asking, “Which of these areas is currently lacking in my life?” to set more meaningful financial targets.
2. Intentional Spending: Organizing discretionary expenses into these six categories to see if money is truly supporting well-being.
3. Retirement Planning: Helping retirees replace the structure and social connections of work with intentional, PERMA-V-aligned activities