Many of us give a great deal of thought to the way we save and invest our money, but I’d like to challenge you to think even more intentionally, specifically about how you spend your money – and your time.
Thankfully, over the past few decades, there has been a substantial amount of research on how we can use the resources at our disposal in slightly different ways to boost our happiness.
In this article, I take you through five research-backed methods to help you buy happiness.
⛵️ Experiences over things
A few years ago, I spent money on a family cruise – and it was worth every cent. Not only did I look forward to the experience and end up having a great time, but I also created memories with my family that will last a lifetime. It’s not often you get to go horseback riding on the beach in Vanuatu!
Society has trained us well to reach for material items, promising they’ll make us happier, but that feeling of excitement when you first buy an item can quickly fizzle out – especially if there wasn’t much intention behind the purchase.
In contrast, research shows that experiences we purchase tend to bring us more immediate and longer-lasting happiness.
Plus, experiences play a significant role in connecting us with others and developing our relationships (which are important contributors to our long-term well-being).
🧠 Add some novelty to your life
Sometimes, many low-cost experiences and purchases can be better than one more expensive one. Although big experiences such as overseas holidays are fantastic, they might mean less money for happiness-boosting purchases throughout the year.
This comes back to the idea of hedonic adaptation, whereby the brain adapts quickly to one big experience or purchase but is slower to adapt to smaller, more regular ones.
After we sleep off the jet lag from our big trip, we’re quickly looking for the next boost of happiness.
You may be able to elevate the happiness that money can buy through mixing up how and what you spend your money on.
According to Elizabeth Dunn, Daniel Gilbert and Timothy Wilson’s paper ‘If money doesn’t make you happy then you probably aren’t spending it right’, you can use the following variables to improve your brain’s perception of an experience:
- novelty (you haven’t experienced it before)
- surprise (you didn’t expect it to happen)
- uncertainty (you’re not entirely sure what it is)
- variability (it keeps changing).
One obvious way to apply the theory of novelty to buying happiness is to do new and exciting things with your money – visiting a country you haven’t been to before, for example, or skydiving if you’ve never done it – but don’t forget about quantity.
Even if you’re doing something small, such as going out for coffee on the weekend, you can still introduce an element of novelty to improve your experience.
For example, you could go to a new coffee shop, shout your friend a coffee or change up the time of day.
You’d still be spending a similar amount of money, but you’d get a different experience – and you might just enjoy it more.
🔮 Anticipate the future
Think about the times in life when you’ve anticipated an event or getting something you really want for hours, days or even weeks in advance.
In the lead-up, you’re visualising your European cruise, imagining your lifestyle in a new house or dreaming about finally getting to visit the restaurant you’ve heard such good things about.
The research backs up these feelings, finding that the more you anticipate an experience, the more enjoyment and satisfaction you get from it.
Have a look at your calendar.
Are there any events coming up over the next six months that you’re looking forward to?
This could be a lunch with a friend, a work conference or a concert you’ve booked tickets to. If there’s not, can you book something that you’re going to look forward to?
Give yourself time to really think about it, visualise it and enjoy the build-up of anticipation beforehand.
For one listener of the Australian Finance Podcast, that was buying a new veggie garden bed, and for another, a Yarra Valley winery tour.
💚 Invest time in your relationships
Modern media tells us that fame, wealth and badges of achievement will make us happy, but that’s not actually the case.
Harvard Psychiatrist Dr Robert Waldinger, current director of the Harvard Study of Adult Development (which has been running for over 80 years now), has shared that all the research points to the quality of our relationships as being the most significant contributor to our happiness and well-being levels over our lifetime.
It takes time, effort and showing up regularly to build quality relationships.
The kind of connections that mean the people you care about will show up for your best and worst moments take time to develop, and they can’t be bought.
As the classic saying goes, people remember how you made them feel, so don’t neglect to build quality relationships on your quest to reach your financial goals.
👏🏽 Give your money away
Consider how you can share the resources you have with others because this has a big impact on happiness.
In his popular TEDx Talk, Michael Norton from Harvard Business School shares that spending money on other people makes us happy. He goes on to say that the benefits don’t come just from grand acts of generosity, such as donating $10,000 to a local school.
The small acts have just as much of an impact on your happiness: for example, spending money at the school fair, buying someone a coffee or donating $50 to an online fundraiser.
Norton also highlighted a 2008–09 survey conducted by the Gallup World Poll that found that in 120 of 136 countries, individuals who donated to charity in the previous month reported higher levels of life satisfaction.
One point to note with this research, says the University of Oxford’s Andreas Mogensen, is the importance of knowing how an organisation is going to use your money. According to the research, the happiness boost is greater when it’s clear exactly how the money helps others.
✅ Now it’s your turn!
Boosting your happiness requires small and regular actions, so I encourage you to choose one of the five ideas in this article and implement it when deciding how to spend your time and money this week.
