Can money buy happiness? I wrote a whole book on this subject and have to admit, I’m still somewhat perplexed by the answer. It’s one of those topics – like why cats purr and why some people are lefties and others are righties – that we don’t have precise answers for.
What we do know is that how you use your money can have a dramatic impact on your happiness. On the first episode of my new podcast, HerMoney, Gretchen Rubin author of The Happiness Project and Better Than Before, put it this way: “No, money cannot buy you happiness, but money can buy you a lot of things that will contribute mightily to happiness.”
“The problem is the way we usually spend money doesn’t pay off for our happiness, but there are ways we can shift our spending to make us happier,” says Michael Norton, co-author of Happy Money: The Science of Smarter Spending and a professor at Harvard Business School.
Given that we all have limited resources, the question is how do you put them to work to give yourself the biggest psychic boost possible? A few suggestions…
Buy Experiences (Or Things That Are Experiential)
Spend $100 on a theater ticket and $100 on a pair of blue jeans. Which is going to make you happier? Assuming you like both, the ticket has the edge. “There’s a lot of research on buying experiences, and one finding in particular is that spending the same amount of money on an experience makes you happier than spending that amount on a material thing,” says Norton. Add an extra splash of serotonin by sharing the experience with other people: experiences with other people make us happier than experiences by ourselves. That said, there are things – a piece of art that you look at daily, a bicycle – that you experience. They up the happiness quotient, too.
Identify Your Values
And if you are buying things, you’ll be best off if you can align them with your values, says Rubin. For example, if you value family time, you might buy a Ping-Pong table that will inspire bonding – or finishing the basement so you have a place to put said table. Or you value your alone time on a long run, but – like me – need a good audiobook to get you going. Maybe you buy an Audible subscription to enrich your experience. (An aside: I’m on Volume 3 of the Jack Reacher series. When I started it my friend, former Esquire editor, David Granger, who had been through the whole thing, said: “Lucky girl!” I concur!)
Spend It On Others
In addition to changing what you’re buying, Norton suggests changing who you’re buying for.“Broadly defined, using your expenses on someone else rather than using that same amount of money to buy something for yourself makes you happier,” he says. It can also make you healthier – as healthy, in fact, as a beta blocker, or starting to work out, according to research published in the journal, Health Psychology. The more money spent on other people, the lower the blood pressure of the subjects two years down the road. One note: Keep your circle of generosity tight. Your heart seems to be happiest – and healthiest – when your recipient list consists of family and close friends. (If you needed an excuse to trim your holiday list, here it is. You’re welcome.)
Your Savings Is Your Shield
Saving money isn’t necessarily fun, nor does it make you happy. But having money saved is fun, and as Norton adds, being in debt is a strong predictor of being unhappy. So, as a preventative measure: Saving money is a good thing. Automating, where you can, makes it easier.
Self-check For Happiness ROI
Finally, put all of the above into practice by doing self-checks at the checkout counter or before you click to buy online. Norton says to ask yourself: “Is what I’m buying going to make me happier?” Or, “Will this give me the biggest happiest bang for my buck?” Or do a little journaling to get a fuller perspective. Track your purchases for a month or so, writing down how you feel about them when you make them, a week later and a month down the road. You’ll quickly see what was worth it – from an emotional perspective – and what you should have skipped.
With Kelly Hultgren
