Money doesn’t buy happiness, says the old adage. We’ve heard this only way too much in inspirational speeches and preachy mantras.
As it turns out, it does.
Provided you spend it right.
Spend on what matters to you
Researchers from the University of Cambridge, UK analyzed almost 80,000 purchases that 625 people made over 6 months and found that those who spent more money in ways that matched their personality traits had scored higher in life satisfaction.
For instance, extroverts tend to spend more money on social activities such as drinking at bars, fitness junkies dedicate more resources to – you guessed it – gym and wellness, and so on.
This study, published in the journal Psychological Science, suggests that spending money can increase our happiness when it’s spent on things that, at the end of the day, meet our psychological needs.
Spend on experiences, not things
Counter-intuitive? After all, technically speaking, experiences are only temporal whereas material buys such as smartphones last much longer.
But Harvard Business School Professor Michael Norton says that the latter loses its luster after a while, whereas because experiences disappear, they let us make up a reality that was amazing and wonderful, and these make us happier than stuff.
Experiences make us happier even before they happen – the anticipation leading up to it is exciting and positive. In fact, people going on vacation are happiest the day before the trip, not during the trip itself.
On the other hand, buying a big ticket item can sometimes be stressful – you worry about whether you’ve bought the best one or snagged the best price, and so on.
Seems like Bo Derek was right after all: whoever said money can’t buy happiness simply didn’t know where to go shopping.
By Pinky Chng, May 2016