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How to (Actually) Buy Happiness

Whether money leads to happiness depends on how it's spent.

Key points

  • People who make less money find greater meaning in their experiences.
  • Our mental health is influenced by how much money we have, and how we think about it.
  • Buying experiences makes you happier than buying stuff.
Charles Deluvio/Unsplash
Source: Charles Deluvio/Unsplash

It came coiled in a fortune cookie--the source of all essential wisdom—and it has stuck with me for years. The little strip reads: “Enough is as good as a feast.”

I remember it when I want that extra slice of pizza even though I’m full and especially when I’m paying my water bill and stewing about the rising prices. Enough is as good as a feast. I have enough.

I’ve always had an uneasy relationship with money. Laid awake nights for years while building my business strategizing how I would pay rent and replace my dying ancient computer. But I’ve always had enough. Food. Water. My basic needs have been met. And, I am grateful.

Money and Mental Health

It’s a crisis in this world that many people don’t have enough to cover their basic needs or don't know where their kids will sleep tomorrow, often through no fault of their own.

The Centers for Disease Control reports that adults living below the poverty line are more likely to experience depression. When members of our community are homeless or living below the poverty line it not only affects their health and well-being but the community’s health as well. No matter what it looks like, this is not an individual problem.

Even living close to the line between enough and not enough is stressful and requires a daily effort to deal with the immediate needs. Choosing to pay the electric bill, for example, could mean forgoing the new brakes for the car. It takes constant evaluation, intense planning. Sacrifice. Disappointment.

That’s when the “If onlies” kick in and the fantasies. If only I won the Powerball, if only I could pay off the car, if only I just had an extra $5,000. The implication is clear, if only… then I’d be so much happier.

That’s true, maybe, up to a certain point. Some research indicates more money makes people happier. Until it doesn’t. More money, if managed appropriately certainly eases stress and affords freedoms and the kinds of recreational and self-care practices that help us take care of our bodies, eat well, exercise, and cover the costs of medical care, housing, and other things that contribute to a sense of security and stability.

But being loaded comes with some stress too, so I hear. Those who invest their money in bigger and better often have the added stress of needing to work harder to afford the maintenance and costs of those things. In this economic climate, it can be stressful watching revenues and returns on investments drop even while costs are skyrocketing. And no matter how much people have, they may be revisited by stress similar to those with less—how am I going to keep up with the house payment and pay my bills now that I'm making less.

Money and Meaning

It’s clear that money plays a significant role in our emotional health, well-being, and happiness. And having more might make you happy, but people with less money can also be happy—they just look beyond the bottom line to see the value.

People with lower incomes are more likely to link meaning to happiness. They believe their life has purpose, value, and direction independent of monetary gain, and as a result, they feel happy, says Jennifer Aaker, Stanford behavioral scientist and one of those who conducted the study along with doctoral student Rhia Catapano.

“The results were almost universally consistent across the United States and much of the world,” Aaker says. “Among low-income people, having a sense of meaning in one’s life is more closely associated with overall happiness.”

Having a sense of purpose and meaning in life correlates with overall well-being and happiness, regardless of the amount of money you have. Yet, meaning often derives from adversity and how we perceive our experiences and the world. Fostering connections, appreciation, and gratitude for what we do have may help people with less income view the adversities they experience as meaningful. In the end, that sense of meaning, purpose, and value for even the challenging experiences can contribute to feelings of happiness.

“People who succeed in finding meaning experience both meaning and happiness, but those who can’t find meaning aren’t happy, consistent with other research,” Aaker says.

Happiness, though, isn’t just tied to what we earn or how we view our lives, it’s also linked to how we spend our money.

Buying Happiness

1. Buy experiences.

We have a beat-up couch in our house that has weathered kids and cats and years of movie watching. One day, we’ll probably replace it, but right now I’d rather spend my money on a summer road trip, a round of golf, or a happy hour with my husband at that new neighborhood restaurant.

These are the things I enjoy. And given the choice, I’ll buy experiences over a new couch or other items.

Sure, it’s fun to get a new pair of shoes or a computer that doesn’t lock up every eight minutes, but the fun quickly turns to familiar and the happiness we feel initially quickly fades.

But that camping trip we took with friends, the impromptu pizza night on the back deck, the paddle we did in rented kayaks—we are still talking about those moments. They hold their value even years later.

When we pay for experiences, those good feelings linger and even build over time as we remember them and share them with others.

This contributes to our happiness and goes toward creating a psychologically rich life.

2. Do something new and novel.

When we seek out novel experiences that are enriching or interesting—like visiting a new exhibit, taking in an author reading at the bookstore, attending a concert, or even picnicking in a new place, or driving a new route home from work—we create a “psychologically rich experience.”

That prompts intense emotions—good and bad--stories to share, perspective, connection with others, and often life-changing or even peak moments that make life more fulfilling, satisfying, meaningful, and richer.

These novel experiences whether they are free or expensive are what make us literally come alive and allow us to engage with our lives in a new way. That improves our health, well-being, and life satisfaction. You can get all that, without spending a dime.

3. Giving to others.

When we share our talents, time, money, and other resources, we also benefit. Generosity increases our gratitude, appreciation, meaning, and other factors that amp up our overall health and happiness.

Research shows that people report greater happiness when they spend part of their bonus—no matter what the amount is—on others or donate it to charity than when they spend it on themselves. This occurs regardless of how big the bonus was. Giving to others makes us feel better about ourselves.

I also believe that our overall health as a community is tied to how well all of the people in that community fare. If we can share what we have with others, even a tiny amount, we are investing in the collective good. That builds optimism, connection, and appreciation--which leaves us all feeling and doing better.

In the end, it’s the way we experience our lives, the meaning we ascribe, and the way we participate that contributes to our bottom-line happiness, no matter how much money we have.

Could we all use more money? Sure. But it's how we spend what we have that makes us rich.