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Key points
- Spending money more intentionally can lead to higher life satisfaction.
- Researchers suggest that buying more stuff usually isn't the answer to acquiring happiness.
- Research has uncovered five areas where spending money can lead to happiness.
Our parents raised us to believe that money can’t buy happiness.
Yet television commercials and our social media feeds imply that if we just had more possessions, we’d feel so much better.
Who’s right?
Surprisingly, both groups are wrong. Research has found that spending money can lead to happiness, but the answer usually isn’t purchasing more stuff. Instead, you’re better off investing money in key areas of life; and in this article, we’ll explore five of them. Soon, you'll know how to increase your happiness ROI the next time you have some extra money to spend.
1. Before you spend money, consider saving it.
While spending money is certainly fun, research has found that saving money can also boost our happiness. In fact, a U.K. study discovered that money in the bank has a stronger tie to life satisfaction than the size of a person’s income.
And no, this financially responsible insight isn’t just for people who have succumbed to adulting. The study tested over 500 individuals ages 18 to 75.
2. Use money to free up your time.
What’s your least favorite chore? Perhaps cleaning the house, buying groceries, or bathing the dog?
Research suggests paying someone else to do these unwanted tasks can make you a happier person.
In one study, participants were given $40 to spend in ways that freed up time and another $40 to make a material purchase.
The results were clear: purchases that freed up time were associated with greater life satisfaction—across a broad range of income levels.
3. Leverage money to make healthy habits easier.
Scientists have discovered that people with healthy sleep patterns tend to be more satisfied with life. Fitness and nutrition have also been linked to happiness. What else do these healthy habits have in common? They can be formed more easily with the help of a little money.
For example, you might be able to improve your sleep by simply purchasing a new mattress or pillow. If you don’t feel comfortable going to the gym, at-home workout equipment could lead to a fitness breakthrough. And for relatively small fees, food delivery services can support your nutritional goals during busy seasons of life.
In many situations, the money you spend to become healthier can indirectly make you happier.
4. Invest money in other people's happiness.
The Bible famously teaches that “It is more blessed to give than to receive.” And while this idea is certainly countercultural, multiple research studies back it up.
In one case, participants were given a small amount of money and assigned to spend it on themselves or other people.
Guess which group reported feeling happier after the fact? The participants who used the money to serve others.
5. Prioritize experiences over material goods.
An impressive amount of research has found that the money we spend on experiences makes us happier in the long term than the money we spend on material goods. That’s because we’re more likely to anticipate experiences and remember them, which extends the positive impact of the purchase.
In a study of over 1,000 Americans, participants were instructed to recall two purchases they made for their own happiness—one material and one experiential. In the end, 57% of people reported getting more happiness out of the experiential purchase, while only 34% chose the material purchase.
Try this bonus tip when buying “stuff.”
Nothing in this article is meant to imply that physical objects are incapable of promoting happiness. I, for one, receive daily delight from my expensive noise-canceling headphones.
Research shows that other uses of money are sometimes more likely to make us happy.
That said, when you’re thinking about buying stuff to increase happiness, take advantage of this smart suggestion from Eric Ravenscraft in The New York Times:
“Spend money where you spend the most time.”
For example, a new boat might sound like fun, but you might get more consistent enjoyment from a new bicycle if you live several hours from the lake.
Hidden in that thought exercise is the main point of this article. Don’t spend money carelessly. Instead, approach purchases with intention. Doing so can lead to higher life satisfaction—and a chance to feel smarter than your parents and friends on social media. If that doesn’t make you happy, I’m not sure what will.
Happy spending.
