Money can buy happiness if you spent it right
Buying experiences can make you happier.
Posted May 21, 2010
We spend a lot of money trying to buy things that will bring us enjoyment. Yet, we all know people with plenty of money who are still not very happy. So, what can money buy you that will make you happy?
This question was addressed in a study by Jing Yang Zhong and Vincent-Wayne Mitchell in the April, 2010 issue of the Journal of Consumer Psychology. The authors of this paper start by making clear that a number of aspects of your happiness are not under your direct control. About 50% of the difference between people in overall happiness is probably due to genetic factors that affect things like your personality. Another 10% of the differences in happiness between people have to do with overall income and marital status. But, the remaining 40% is there to be influenced by aspects of your behavior.
The authors point out that many of the purchases we make regularly are meant to satisfy basic needs. We buy food to eat, we pay for our shelter, and we buy clothes. But at least some of the purchases we make each month are meant to be experienced. Going to a concert or a movie or out to eat at a restaurant would fall into this category of purchases. So would paying money to play on a sports team or taking art classes at a local studio.
Do these kinds of purchases make you happier?
To answer this question, the authors examined the data from a survey of 5000 households whose purchases and happiness were tracked over a four year period.
The results were quite interesting.
Being able to spend money on purchases designed to create positive experiences increased people's happiness. The best way to increase happiness, though, was to make a series of smaller purchases rather than one big one. Think of it this way. The people who went to a series concerts by a few local bands were happier overall than the people who spent the same amount of money but got great seats at a concert by a top band. So, it is better to spread the positive experiences out than to try to achieve one "peak" experience.
How did these purchases affect people's overall sense of happiness? By looking at the data in more detail, the authors found that these purchases affected people's satisfaction with the area of their lives that were affected by the purchase. People who spent money on experiences related to their social life saw an improvement in their satisfaction with their social life. People who spent money on experiences related to fitness saw an improvement in their satisfaction with their health. These increases in satisfaction with a particular area of their lives also affected people's overall sense of well-being and happiness.
So if you spend your money on experiences, you can increase your happiness. There are a two key ground rules, though. First, stay within your budget. Spending more money than you have creates stress and lowers happiness. Second, don't blow all of your money on one great event. You are better off sitting in the cheap seats for a number of sporting events than sitting courtside at one. Spread those good experiences out over time.
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