Money CAN Buy Happiness

Get Rich Slowly has a two-part article on how to buy happiness with money. It’s true, money can’t buy you love or friendship, but it can still make you pretty happy if you spend it the right way. The article is a summary of a research paper called “If Money Doesn’t Make You Happy Then You’re Probably Not Spending It Right” (PDF), which  says that people are very poor judges of what will make them happy, and they end up spending their money on all the wrong things. The paper is written by a trio from Harvard, University of Virginia, and University British Columbia, so presumably they know what they’re talking about. Here’s what they suggest you do your money, instead of blowing it on your retirement like you know you want to:

  • Buy experiences, not stuff. After a month, that t-shirt or couch or stainless-steel fridge/washer/dryer combo won’t do anything for you. Instead, spend that money hanging out with your friends, or going on an awesome vacation, or both. And take pictures. In a few years, all you’ll remember is the good parts of what you did, and it’ll make the experiences seem even better. Stuff on the other hand, just ends up owning you with its constant demand of being paid off, cleaned, fixed, and upgraded.
  • Help others. If you’ve ever given a good gift, you know what this is talking about. Doing one thing to make someone else happy will make you happier than doing a dozen things for yourself. So buy people good gifts, give bums change, and help people out whenever you want. Maybe all those major religions were on to something.
  • Buy less expensive things more often, rather than just saving up for big ticket items. Do both if you can, but if it’s one or the other, ten dinners out at Applebee’s will probably make you a lot happier than one super-fancy one at Ruth’s Chris. And a cup of coffee from Starbucks every morning will probably make you happier than a new lamp.
  • Quit worrying about stuff. If it breaks, it breaks: unless you’re an emotional mess, you’ll deal with it and it won’t be the end of the world. And if you set up insurance for everything, you won’t enjoy it as much because you take it for granted. Obviously get insurance for stuff you absolutely need (like your car and house), but not for your Wii. It’s a waste of money for one thing, and it makes you appreciate it less for another.
  • Wait before you buy. If you just buy everything you want when you want it, you won’t appreciate it, and you’ll spend a lot of money on stuff you’ll never use like… lets see what’s on my desk: ah yes, an M&M Dispenser. And if you wait for a while, the anticipation makes it even better. Like waiting for a Christmas gift.
  • Beware the downside. Everything comes with good and bad sides. An awesome ski trip comes with a long flight, hauling a snowboard around, and sore muscles. A new puppy comes with all kinds of barking and cleanup and having to come home every 5 hours to feed it. Make sure the downside of the stuff you buy is worth the upside.
  • Beware comparison shopping. You look at two phones, and you want something that has a big screen and feels nice, and has all the apps you want. But they all do that, and before you know it you’re spending 100$ more on one that has integrated face recognition, which two days ago you didn’t even know existed, and two days from now you won’t even care about.
  • Ask the audience. If you want to go to Greece, see if other people loved Greece. If you want to go see Sucker Punch, don’t: it sucked. If you want to buy an iPhone, ask your friends if they love it. How much other people like something is biggest predictor for how much you’re going to like it.

Via Get Rich Slowly

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