Why Money Can Buy You Happiness… If You're Spending It Right
It should be pretty apparent by the sheer number of sad rich people in the world that money does not, in fact, buy happiness. Those who are poorer may be likely to believe on some level that more money would allow them to be substantially happier, but it’s how people spend that really matters.
Two Harvard professors completed a study on the subject and published the results in the book, “Happy Money: The Science of Smarter Spending.” According to Elizabeth Dunn, one of the authors, the crux of the issue is that “people mispredict what will make them happy, how happy it will make them, and how long that happiness will last.”
Apparently, money can buy happiness. These patterns highlight how:
-Buy Experiences: research proves that material purchases are less satisfying than shared experiences.
-Make it a Treat: limiting access to your purchases keeps you appreciating them.
-Pay Now, Consume Later: delayed consumption leads to increased enjoyment.
-Invest In Others: spending money on other people makes us happier than spending on ourselves.
Spending on experiences
Most of us have all gotten super excited about a big purchase just for it to become not so exciting a week or so later. Even worse, we have buyer’s remorse after failing to realize something wouldn’t provoke the anticipated happiness quotient. Materials wear down with time and become outdated, and as this occurs, appreciation for the goods also decline. Experiences offer novelty and variety, plus, memories last for a lifetime.
Furthermore, upon purchasing lessons or vacations with others, the social connections that you make will result in feeling happier than you’re likely to feel after spending a few hours alone in front of a new television. Ultimately, we are the sum of our experiences, not the sum of our possessions.
Make it a treat
Like anything in life, if you do something all the time, it becomes routine and you’ll start to enjoy it less. Get you daily latte twice a week and you’ll appreciate it more. By choosing to make something more novel, it will offer more appreciation and happiness.
Creating experiences to look forward to brings increased happiness. It’s similar to the excitement that wrapped presents under a Christmas tree can spark – that anticipation that you can see the presents, which you will soon tear open, makes the time leading up to the happy moment… happier.
Spending on others
The benefits of giving are highest when a giver feels that the act of giving was a free choice. We are programmed to be highly social, so it makes sense that much of our happiness is dependent on the quality of our relationships. Dunn adds, “almost anything we do to improve our connections with others tends to improve our happiness as well, and that includes spending money.”
So if you’re deciding between buying a new couch or going on a nice vacation, consider which will likely make you happier for a longer amount of time. Realize that the way you spend can greatly influence your mood and perception on life. Make sure you’re properly investing in your happiness — or better yet, someone else’s.