Money Can Buy You Happiness (It's All About How You Spend It)

By: Rick Mauro

You know the ad that asks whether you’ll look back on your life and regret the things you didn’t buy, or the places you didn’t go? Does it strike a nerve with you — because it sure does with me.

In today’s have-it-all materialistic world, we’re all guilty of occasionally exercising a little “retail therapy” to make ourselves feel better, but the reality is – and studies support it –

BUYING STUFF WON’T BRING HAPPINESS AND CAN IN FACT MAKE YOU FEEL WORSE. HERE’S WHY.

Possessions are temporary by nature and fade over time. They look shiny and new in the store but as soon as the package is opened, they begin to perish, spoil, fade or lose their novelty. The problem is, we’re hardwired to want new things. Certain regions of the brain are actually drawn to novelty and can influence what we predict will be rewarding.

When we see something that could provide a reward (say, a fancy power tool) our brain releases a neurotransmitter called dopamine. Dopamine motivates us to get that reward but tends to prioritize instant gratification, often at the expense of more important long-term goals and wellbeing. And, as we all know, there is always something new right around the corner. New models, new styles, new improvements, and new features.

EACH PURCHASE ACTUALLY ADDS EXTRA WORRY TO OUR LIVES AS EVERY PHYSICAL ITEM WE BRING INTO OUR LIVES REPRESENTS ONE MORE THING THAT CAN BE BROKEN, SCRATCHED, OR STOLEN - AND OF COURSE HAS TO BE PAID FOR.

Expensive new toys require maintenance such as cleaning, organizing, and storage. And no matter what we’ve bought, we soon discover other people aren’t all that impressed. Regardless of how much we’ve spent, someone else will always have more. Material purchases are inevitably subject to comparison and your fancy gadget will be harder to appreciate when an updated version is released.

In many cultures around the world, material goods signal social status and advertising increases materialism – even in children – while social media boosts consumption. We all know that buying material possessions can provide a quick boost to enjoyment and happiness. Playing with a new phone is fun and getting a truck might boost your confidence. But, like that donut you absolutely had to eat, such enjoyment is fleeting. Your brain quickly readjusts to the new normal, and in a very short time, those exciting new purchases stop generating happiness. This effect actually has an official name: “hedonic habituation.”

The shiny new object quickly loses both its luster and the perceived happiness associated with it just about the time that the credit card bill comes in.

But here’s the good news. Contrary to what I’ve just said, money can indeed buy happiness. Spending on things like vacations, dining out and going to concerts may seem temporary, ephemeral and intangible, but the reality is that those investments can bring lasting benefits by creating memories with friends and family you’ll cherish and relive for years to come. Years of research show that experiential purchases are far more likely to boost your happiness than more tangible items.

YEARS OF RESEARCH SHOW THAT EXPERIENTIAL PURCHASES ARE FAR MORE LIKELY TO BOOST YOUR HAPPINESS THAN MORE TANGIBLE ITEMS.

Experiences also provide substantial long-term benefits. In one study, people were asked to think of both a material purchase and an experiential one.

REGARDLESS OF THEIR BACKGROUND, PEOPLE REPORTED THAT THE EXPERIENTIAL PURCHASE MADE THEM HAPPIER THAN THE MATERIAL ONE. Moreover, people reported being in better moods after being reminded of their experiential purchases, compared to their material ones.

Experts note that every time you reconnect with the memory of a happy experience, you feel a little bit of the happiness associated with it. And that feeling is free!

Experiences increase happiness by facilitating connections with others. People are social creatures: meaningful interactions and relationships with other humans are crucial to our happiness and well-being Concerts, fairs, ball games, and vacations are all social events, often involving friends, family, or those who share your interests. Even after the actual event ends, reflecting on shared experiences makes us feel closer to those we care about.

The places you go and the things you do are also great fodder for stories and conversation.

Think about it: people talk more about their experiences than their possessions, and reminiscing about happy times increases satisfaction.

Other people are always more interested in hearing about your recent vacation or the dinner you had at that new restaurant than they are in endlessly discussing the features of that new power tool.

Research finds that people enjoy conversations and like other people more when they discuss experiences rather than material items.

What kind of experiences are most likely to improve happiness? It varies based on individual personality and preferences, so experts suggest you spend time reflecting on what makes you happy, what you love to do and what feels important to you.

WHEN DECIDING ON A PURCHASE, EXPERIENTIAL OR MATERIAL, ALWAYS TAKE TIME TO THINK ABOUT HOW IT WILL FIT INTO YOUR OVERALL GOALS FOR WELL-BEING.

Are you exercising retail therapy for a short-term happiness fix? Will your purchase really generate residual happiness through repeated reflection and recollection? Would a great outing with your family provide longer-term satisfaction?

Spend your time to understand what you value most before you spend your cash and it will be time well invested.