How to get the most benefit from the money you spend
Experiences Buy more Happiness than Things
There is no doubt that money impacts short-term happiness in that we have control over how we spend our time. If you have enough money to quit work while kids are young that might impact your happiness for the time being. If you have enough money to change careers and do what you love, that can impact money. And yet, there are a number of interesting studies that show how and what we spend our money on directly makes us happy.
A team of Harvard researches surveyed people on their spending habits and found that spending money on others does boost happiness whereas spending money on oneself does not affect level of happiness.
Then the old Retail Therapy, when you are down – go shopping. Bad moods make more bad decisions and we spend the most when we feel unhappy. No surprise. Let’s take that further, if we want to keep our financial stress low we need to manage our money well. If we are happy, healthy, and joyful we tend to spend less and therefore have more money.
Then there is the choice between the new dress, table or TV and spending on a great vacation – an adventure – a memory that can never be taken away. Our experiences last while our purchases fade away. We relive these memories through stories, writings, photos, books, websites, blogs, and sharing years later about your adventure rafting down the Grand Canyon years later. Carter and Gilovich in the Journal of Personality and Social Psychology report that as our income increases (for those with expendable income), buying an experience (i.e. a vacation, a learning event, a play, movie, dining out) provide us with two to three times the level of wellbeing that a material purchase provides.
Rule of thumb, we are less likely to regret buying an experience than a thing. This in turn makes us feel good and not feel regretful, remorseful, or mad at ourselves.
This summer Jean (my husband) and I are investing in a ballroom dance class – six weeks of enjoyment plus we get to practice during the week and put on jazzy salsa music. In return, I am wearing my year old bathing suit one more year and refraining from buying those cute little sandals in the window.