Conventional wisdom says that money can’t buy happiness. In fact, research shows that money can make us happier—but only if we spend it in particular ways.
In their book “Happy Money: The Science of Smarter Spending“, authors Elizabeth Dunn and Michael Norton draw on years of quantitative and qualitative research to explain how we can turn cash into contentment.
The key lies in adhering to five key principles:
Buy Experiences (research shows that material purchases are less satisfying than vacations or concerts);
Make it a Treat (limiting access to our favorite things will make us keep appreciating them);
Buy Time (focusing on time over money yields wiser purchases);
Pay Now, Consume Later (delayed consumption leads to increased enjoyment); and
Invest in Others (spending money on other people makes us happier than spending it on ourselves).
“One of the most common things people do with their money is get stuff,” explains Norton, an associate professor of marketing at Harvard Business School. “But we have shown…in research that stuff isn’t good for you. It doesn’t make you unhappy, but it doesn’t make you happy. But one thing that does make us happy is an experience.”
It’s not just individuals who should be thinking about investing in experiences when making purchasing choices. Policy makers should also keep this reasoning in mind for their communities. When there are plenty of parks, bike and hiking trails and other recreational opportunities available in the community, you can expect to have a happier population.
Have a Happy Weekend