As much as we like to romanticize poverty, there's no denying that money is important. Many of life's pleasures and necessities, like having free time to spend with loved ones and obtaining good quality health care, require sufficient finances. But research suggests that the relationship between money and happiness is much smaller than one might expect.
In a 2011 review article, Elizabeth Dunn, Daniel Gilbert, and Timothy Wilson argue that the main reason that money does not buy as much happiness as it should is because we don't spend it wisely. It's not that we're throwing it around thoughtlessly, but rather that we're not very good at predicting what will make us happy. That fancy new car might seem amazing in our fantasies, but in the end it's just a car, and we'll get used to it. In the article, Dunn, Gilbert, and Wilson propose a number of strategies, backed by research, that can help people truly buy more happiness, regardless of how much money they have. Here are my four favorites.
1. Choose experiences over possessions: Both experimental and survey research suggests that experiential purchases, such as a trip or a concert, make people happier than material purchases, such as new clothing. One reason for this difference is that we get used to material things quicker, whereas experiences tend to be more dynamic and changing, countering our tendency to habituate to the familiar. Experiences also tend to have more staying power in our memory, providing pleasure whenever we revisit them in our minds (perhaps imagining them as better than they actually were, a luxury that cannot be afforded to objects in our presence). Finally, experiences tend to feel more meaningful, defining who we are, facilitating personal growth, and giving us opportunities to connect with other people.
2. Give and you shall receive: Humans are social animals, and we care deeply about our social connections. Although we've been trained to look out for number one, it turns out that spending money on others generally makes us happier than spending on ourselves. One nationally representative study showed that, controlling for income, people who spent more on gifts and charitable donations were happier overall. Similar findings were obtained cross-culturally. Interestingly, an fMRI study found that participants who chose to or were asked to donate money to a local food bank showed brain activation similar to the pattern of activation involved in receiving rewards. Giving feels good in part because it makes us feel good about ourselves - we feel helpful, appreciated, and more secure in our relationships.
3. Allow yourself small indulgences: Would you rather eat one huge chocolate cake in one sitting, or lots of small pieces spread out over a longer period of time? Most of us would choose the small pieces, but when it comes to our purchases, we tend to assume that bigger things will buy us more happiness, and we underestimate the power of adaptation, or diminishing returns. Smaller, more frequent indulgences, by contrast, have the advantage of variability and novelty. For example, in one study participants estimated that they would derive more pleasure from one continuous 180 second massage, as opposed to two 80 second massages separated by a 20 second break, but in fact they preferred the latter. The interrupted approach capitalizes on our tendency to enjoy the first part of a pleasurable experience the most.
4. Don't forget about the mosquitos: In other words, everything seems better in the abstract. The authors give the example of the dream vacation home on the water, which seems like it would bring needed peace and quiet, and an opportunity for the family to get together more. When envisioning this dream home, however, most people fail to consider the less-than-ideal details, such as "Aunt Mandy's snoring" and the incessant itching of mosquito bites. Of course, the anticipation of pleasure is an essential part of it (some might argue the most important part), and it's probably better not to worry too much about the annoying details when anticipating an upcoming event. In fact, another strategy the authors mention is to delay gratification in order to enjoy the experience of anticipation. However, the downsides of a big purchase are important to consider before making it, especially when the purchase may come at the expense of something else, like the kids' college fund.
In sum, although wealthy people aren't necessarily happier, those who know themselves well enough to spend wisely may indeed be able to buy themselves some happiness.
This post previously appeared on Psych Your Mind.