Skip to main content

Verified by Psychology Today

5 Things Happy People Do Every Day (and You Can, Too)

Money can't buy happiness, unless you spend it the right way.

My research team and I just completed a study to examine the differences in how happy people live their lives compared to people who are unhappy. Because we were interested in several characteristics of happy people, including the relationship between money and happiness, we examined the predictors of happiness from 30 different surveys. These surveys measured people’s spending habits, consumer choices, values, and personality traits.

The results indicated that happy people make 5 little decisions every day that improve their well-being. What are these 5 importance differences between happy and unhappy people, based on our recent consumer behavior studies?

  1. Happy people think about the past fondly.
    Perhaps unique among all animals, humans have the capacity to travel backward and forward in time—to use the “specious present” both to relive past life events and to think about the future. Our data shows that happy people appear to relive the ecstasy, but ignoring the agony, of days gone by. When happy people think about their past they focus on their good memories instead of dwelling on the negatives.
  2. Happy people “catch” the emotions of others.
    Some sensitive people are vulnerable to experiencing others’ emotions—they can “catch” them during joyful (and sorrowful) experiences. Our data shows that when someone smiles warmly at happy people, they smile back and feel warm inside. Therefore, if you pay more attention to the positive emotions of other people, you should be happier.
  3. Happy people live in a great community.
    A person is happiest when three basic psychological needs are satisfied: autonomy, competence, and relatedness. Literally thousands of studies demonstrate the positive effect of psychological need satisfaction on happiness. Our data shows that these psychological needs can be met by one’s community. Happy people say that they feel belongingness where they live and that they look forward to coming home when they have been away.
  4. Happy people manage their money well.
    Something that any of us can do every day is to make a budget and track our financial transactions so we don’t make impulsive purchases. Research suggests that individuals will manage their money better when they have a clear goal—for example, paying off a credit card, saving for a comfortable retirement, or starting an emergency fund. Our data shows that if you manage your money better today, you will be happier tomorrow.
  5. Happy people spend their money on life experiences instead of material items.
    Almost 10 years of research has investigated the effects of investing money in life experiences, as opposed to material items. There is now robust evidence that when people spend their money on life experiences they are happier than when they spend on material goods. However, our data further shows that people who habitually spend their money on life experiences are happier than people who tend to buy material items.

Beyond The Purchase is a website dedicated to understanding the psychology behind spending decisions and the relationship between money and happiness. We study how factors like your values and personality interact with spending decisions to affect your happiness. At Beyond The Purchase you can take quizzes that help you understand what motivates your spending decisions, and you’ll get personalized feedback and tips. For example:

Finally, I am pretty excited about our gratitude intervention and some of the benefits you can experience if you take part. If you go to BeyondThePurchase.Org you can find our two-week gratitude intervention. Every night after you complete our brief gratitude journal, we will tell you how grateful you have felt today—we also have a graphic displaying how grateful you have felt each day of the intervention so you can see how much grateful you are. Also, after the intervention we will provide you personalized feedback about how much your gratitude has changed over the last two weeks.

With these insights, you can better understand the ways in which your financial decisions affect your happiness. To read more about the connection between money and happiness, go to the Beyond the Purchase blog.