- We’ve all heard the phrase “money can’t buy you happiness,” but the truth is that using your resources in certain ways can cultivate long-lasting feelings of positivity.
- Buying back your time, for example, or giving to charity will absolutely make you happier.
- Spending a bit of money on small, periodic indulgences can also add uplift to your routine.
- Read more personal finance coverage.
“Money can’t buy you happiness” is a misunderstood phrase. People take it to mean that having money is irrelevant to being happy, but really it just means that happiness can’t be bought and sold like an item at a store.
There’s no doubt that money and happiness are inextricably linked, but more of one doesn’t necessarily mean more of the other. It’s not about amassing wealth, but rather using that wealth as a tool to cultivate long-lasting feelings of positivity.
As I’ve progressed in my career and earned increasingly more money, my own happiness has – with a few exceptions – increased over time. But that has less to do with the number on my pay stub and more to do with how I’ve changed my financial habits to prioritise personal well-being.
So how can the average person use their money to increase happiness? Here are some tested and proven methods to consider.
Buy yourself time
Research from Harvard professor Ashley Whillans found that consumers who spend money to save time are happier than those who spend that money on material objects.
We all feel pressed for time in today’s society. One way to counteract this feeling is to spend money on time-saving activities and services, like hiring a neighbourhood kid to mow the lawn or paying a cleaning service to tidy up your home.
Start by making a list of chores and errands that take up a lot of time, such as laundry, cooking, or grocery shopping. Then, start figuring out how you can outsource these tasks to free up time.
Can you hire someone on TaskRabbit to assemble your new IKEA couch? Can you pay for expedited shipping on a birthday gift you forgot to buy instead of driving to the mall on a Saturday morning?
If you’re self-employed, your time is even more valuable because every hour you spend doing chores or errands is an hour you’re not working. If you’re working on a project that pays $US75 an hour, for instance, paying $US5 for prescription delivery might be a worthwhile trade-off.
Instead of buying a gold watch or diamond earrings for Valentine’s Day, convince your spouse to spend that money on babysitters for date night. You’ll get more enjoyment out of being together for a few hours a week than you will looking at your new piece of jewellery.
“Buyer’s remorse is a dreadful feeling, but I’ve never worked with anyone that regretted paying money for an experience with their family or friends,” said Matt Cooley, certified financial planner with Inspire Wealth Partners.
Indulge in small pleasures
Happiness researcher Elizabeth Dunn recommends that people spend smaller amounts of money more frequently instead of buying larger items.
Think about how you can add small pleasures to your daily life. These can include indulgences like a cookie from the cafe attached to your office or a 30-minute massage after work.
The frequency of these small pleasures is key, not their duration. Dunn’s research found people were happier getting two separate 30-minute massages than one 60-minute massage.
Spacing these small pleasures out allows for happiness boosts at regular intervals. Instead of having a mani-pedi, for example, schedule a separate manicure and pedicure a week or two apart.
Give to charity
Researchers from Harvard asked people how they would feel spending money on themselves compared to how they would feel giving it away, then gave test subjects the opportunity to do one or the other.
Most participants said they would feel best buying themselves something, but the group that gave money away actually felt better after the fact.
It may seem counterintuitive, but giving money away actually makes you happier than spending it on yourself. Contributing to someone else’s well-being is a powerful feeling, and giving them money is the easiest way to do it.
Being generous with our money also makes us feel grateful for what we have, and cultivating gratitude is another proven way to increase happiness.
Spend on experiences
Spending money on experiences instead of possessions has been shown to make humans happier. The anticipation of the event brings a degree of happiness in itself. That’s why we love daydreaming about our beach getaway, imagining how happy we’ll feel lounging on the sand with a good book.
When the event is finished, we can replay the memories over and over. Memories of vacations, concerts, and quality time spent with the people you love far outlast the memory of buying a new outfit.
“When you try to find happiness in stuff, you’re like a rat in a wheel, spending money just to keep up with the Joneses,” said Kyle Hill, certified financial planner with Hill-Top Financial Planning. “Speaking from personal experience, a trip to Disney World buys more happiness than all the Buzz Lightyear and Woody dolls you can buy. Over a year later, our family still talks about that trip to Disney World and dreaming about going back again.”
When money doesn’t buy happiness
Sometimes money can bring a brief spurt of happiness that eventually goes away, a phenomenon known as the hedonic treadmill.
The basic idea is that people adapt to both good and bad situations relatively quickly. Buying the Mercedes you’ve always wanted may bring a happiness spike, but it will eventually go away.
On average, the joy from a new purchase lasts between six and eight weeks. This is different than taking a vacation, because memories from your honeymoon will last forever.
The worst way to spend money from a happiness perspective is to buy something that costs time, which is even more precious than money. Owning a massive house with a pool and a huge yard might seem like a dream come true, but not if it adds 30 minutes to your commute and an extra hour to your mowing time.
Obviously this doesn’t mean you should completely avoid upgrading your lifestyle, but just don’t expect your new car to give you the same thrill every day as when you drove it off the lot.
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