So if we have any extra money to spend after all our basic living essentials are covered, how can we get the most happiness out of it?
Many articles and research studies have been done about this question with them all having pretty much the same answer: buy a mini horse. Article over.
However, it might be a bit more complicated than that (for some people) with the main reason being that we adapt quickly to new things. This ability we have as people to adapt quickly to new situations is great when it comes to many things (or else driving instructors for teenagers may not exist). But it all means we often don’t get the benefit from our spending that we think we will if we’re buying something because it seems new and exciting since what is new and exciting today will no longer be in the near future.
So if we adapt quickly to new stuff, let’s look at 3 ideas on how to get more happiness from our spending. Credit to Happy Money: The Science of Happier Spending by Elizabeth Dunn & Michael Norton for summarizing the many research studies done in this area.
1. Spend on experiences rather than physical items
Physical items don’t change and tend to last a while, which makes it much more likely we’ll get used to them. Experiences are shorter and different each time so we’re less likely to adapt and become bored with them as compared to physical items. We can likely all think of physical items in our garages or closets or hidden under beds that we just don’t use or think about anymore (I really should use that portable hammock more often…).
But with experiences, we get to remember them through our memories and the stories we share with others. Think about spending on experiences as an investment in memories that you can come back to in the future that will bring you joy again. After all, what do you talk about when you’re sharing stories with friends and family, a meaningful experience you had or the resolution quality on your TV (let me tell you about these contrast ratios…)?
2. Spend to save time and eliminate having to do less enjoyable tasks
Using our finances to enable more time to do what we want is what we’re seeking after all. There was a time in my career where I was working 60+ hours a week consistently and then maybe have half of a weekend off work and guess what I didn’t want to do in that time off: anything related to lawn care.
Guess who got tired of the grass being a couple of feet high: my family (who I had told I’d get to it). Guess who got tired of hearing about it from said family…so I consider hiring a gardener for that season of life as one of the best investments in my life because it saved time – both from actually taking care of it and the “reminders” from my family.
So let’s think about how we could allocate our spending to save time or eliminate tasks we don’t want to be doing. This could be shortening a commute by living closer to work, or paying for services we could do ourselves but just don’t have time for now (e.g., car maintenance, household cleaning, grocery deliveries, etc.).
3. Spend on other people and organizations you believe in
The Bible reminds us that our giving actually also benefits us (Acts 20:35). Research studies have shown the same thing, people who give and spend money on others feel happier. And it doesn’t have to be a lot of money, this research was demonstrated with wealthy and less wealthy countries and people.
I believe this is related to our desire to live meaningful and impactful lives – spending money to help others or support causes we believe in is a direct way of trying to make a difference with our lives.
Takeaway
To get the most of our spending, we think about what types of spending create more joy or happiness for us. This is likely to be different for each of us, but research studies have shown that spending on experiences, to save time and to benefit others is more likely to bring us happiness. So we aim to increase our spending in the areas that bring us more joy while reducing our spending in the areas that do not make as much of a difference to our happiness.
