From Sonja Lubomirsky’s book “Myths of Happiness”
People often spend money in ways that they think will make them really happy, but in reality it didn’t really affect their overall happiness.
What Are the Best Ways to Spend Money to Maximize Happiness?
Spend Your Money on Experiences Rather Than Possessions.
“Growing evidence reveals that it is experiences—not things—that make us happy. Many experiences, such as hikes with friends or family game nights, are virtually free.” (p. 152)
- “whereas material objects typically grow old and dull with time, until we are eager to replace them, experiences can actually grow even more positive and more enjoyable as time passes.” (p. 153)
- “We are more likely to mentally revisit our past experiences than our purchases, and the more we revisit and replay them, the more they blossom and the richer stories they provide.” (p. 153)
- “experiences are intrinsically more social—more likely to be shared, anticipated, and relived with other people—than are things. Vacationing or bowling with a friend is a lot more likely to cement our friendship than talking about or showing off our new wristwatch or bedroom set.” (p. 152)
- “experiences—like climbing a mountain, visiting a remote location, or learning to dive—may involve challenges and adventures, and it makes us happy to exert effort to endure a difficult lesson or journey and relish the feeling of hard-won accomplishment.” (p. 154)
- “the happiest people are those who are most skilled at wringing experiences out of everything in which they invest their money, whether it’s a guitar, a plane ticket, a picture book, a dress, a camera, cake decorating lessons, or running shoes.” (p. 152)
Spend Your Money On Many Small Pleasures Rather Than a Few Big Ones.
- “A simple thrift strategy is suggested by research on the emotional benefits of forging positive experiences that are frequent rather than intense (e.g., several modest restaurant dinners rather than a single blowout)289 and separated rather than combined (rationing out our favorite Sopranos episodes week by week rather than splurging on several at a time). (p. 154)
- “We will obtain more enjoyment from a bittersweet chocolate bar if we cut it into squares and eat one piece per day, instead of devouring the whole thing in a single sitting. We will obtain more pleasure if we divide our spending money, however scant, into several portions, and dole it out to ourselves once or twice a week. One researcher, for example, interviewed people of all income levels in the United Kingdom and found that those who frequently treated themselves to low-cost indulgences—picnics, extravagant cups of coffee, and treasured DVDs—were more satisfied with their lives.” (p. 155)
Spend Money on Need-Satisfying Activities.
- “Perhaps the most direct and most reliable way to maximize the happiness and fulfillment that we can extract from money is through need-satisfying pursuits—for example, by spending our capital on developing ourselves as people, on growing, and on investing in interpersonal connections. In other words, the purchases or expenses that will yield the greatest emotional benefit are those that involve goals that satisfy at least one of the three basic human needs—(1) competence (i.e., feeling capable or expert), (2) relatedness (i.e., belonging and feeling connected to others), and (3) autonomy (i.e., feeling a sense of mastery and control over one’s life). Such activities have been shown by researchers to bring happiness and, equally important, not to stimulate ever-increasing addiction-like desires for more and more.”
- “Spending money on need-satisfying goals, like mastering a new sport, celebrating a friend’s achievement, or taking one’s nephew on a safari, can trigger “upward spirals”—that is, streams of happy moods, optimistic thoughts, and kind acts that gain momentum, propagate, spill over, and reinforce one another as they unfold.” (p. 173)
Spend Money on Others, Not Yourself.
- “the more they spent their money on gifts for others and charitable donations, the happier they were. Notably, the amount they spent on gifts for themselves, bills, and expenses was unrelated to their happiness.” (p. 175)
- “Why investing our wealth in other people makes us happy seems too obvious a finding to explain. When we give to others, we feel not only more positive about ourselves (that is, as a compassionate, altruistic person) but about the recipients as well (that they are worthy of our kindness and respect). We feel less distressed about the poverty and suffering in the world and in our neighborhoods, and we gain a greater appreciation for our good fortune. We are distracted from our own petty problems and ruminations. Sharing with others, when it’s not done anonymously, also, of course, stimulates positive social interactions, generates new friendships and relationships, and improves old ones. Because of all these reasons, as experiments from my own laboratory have shown, extending generosity or kindness is one of the most powerful ways to bolster and sustain well-being.”
Spend Money to Free Yourself Time.
- “If we spend our money to open up more “free” hours in the day—for example, by reducing our work hours (because we already make enough) or paying others to perform time-consuming chores (e.g., fix the plumbing, stand in line at the post office, fill in tedious documents, call airlines)—we can spend our time enjoying those things in life that both empirical and anecdotal evidence suggests make us happy.” (p. 176)
- “For example, connecting with friends, nurturing intimate relationships, socializing at parties, consuming art, music, and literature, learning new languages and skills, honing talents, and volunteering at our neighborhood hospital, church, or animal shelter. Tellingly, these are precisely the activities that people on the brink of death, like mountaineers caught in a blizzard on Mount Everest, wish they would have spent more time doing in their everyday lives.” (p. 176)
Prepay for Things, and Enjoy the Anticipation
- “The obvious recommendation from all this research is that we should pay for our desired object days or weeks before we hold it or experience it.”
- “Indeed, researchers who studied a thousand Dutch vacationers concluded that by far the greatest amount of happiness extracted from the vacation is derived from the anticipation period, a finding that suggests that we should not only prolong that period but aim to take several small vacations rather than one mega-vacation.” (p. 178)
- “By this approach, we will always have something wonderful to look forward to in the future. Of course, since the advent of swift and easy credit, many individuals do the exact reverse, dutifully following the principles of economics—instead of paying now and enjoying later, they enjoy the purchase now and pay for it later. This opposite approach promotes impulse shopping and, by my count, encourages at least four of the Seven Deadly Sins (gluttony, greed, sloth, and lust). Even if we can afford to impulse-buy as much as we desire, these types of “instant gratification” purchases are not the types that make us lastingly fulfilled.” (p. 179)