Money cannot buy happiness per se but can be used strategically to enhance our joy and well-being. By investing in experiences, engaging in prosocial spending, and freeing up time with money, we can harness our financial resources to lead happier lives.
The pursuit of happiness has always been part and parcel of human life. It has come to be considered the goal of goals, more so in the modern world where other-worldly goals like moksha or salvation are losing traction. Common wisdom says that no matter how much money you have, you cannot buy happiness. But that relates essentially to material comforts like a nice house, consumer goods and consumables, and relaxing activities like watching a movie or taking a vacation. We all know the limits of them all, the transitoriness of the happiness produced, and the trade-ins.
Enter science, particularly psychology, which has now been delving into understanding the factors that contribute to our joy and satisfaction from a diverse range of our activities and pursuits. Interestingly, some of these findings link the purchases we make to the degree and quantum of joy we feel. The key point that has emerged is that you can find happiness not by acquiring more material possessions but by investing in experiences, buying time-saving measures, and spending on social good projects. Here is what we have learned to harness our financial resources to lead happier lives.
- Seek experiences, not material things
The age-old question – do you prefer material goods or experiences? According to research, experiences are the way to go if happiness is your end goal. Psychologists Thomas Gilovich and Amit Kumar from Cornell University have conducted numerous studies demonstrating that experiences bring more happiness than material possessions. But why is this the caseExperiences contribute to our identity much more profoundly than material goods. The memory of watching a beautiful sunset or traveling to an exotic locale forms a part of who we are, and it is these memories that we ver
We don’t need science to tell us this, we all have experienced it to some degree. Well-curated experiences provide happiness before, during, and after the event. The anticipation of an experience, like a musical soiree or a vacation or even visiting your family back home, can bring as much joy as the event. The event provides enjoyment, and afterward, the memories can be relived, prolonging its shelf life. They all cost something, but you might consider choosing one of them over a new model of IPhone.
- Prosocial spending – Charitable giving
Expenditure becomes prosocial when we spend money on others or good causes and donate to charities. Psychologists and economists have found a strong link between prosocial spending and happiness. A major study cited most often is by Prof Elizabeth Dunn at the University of British Columbia found that individuals reported significantly greater happiness when they spent money on others rather than themselves. This result held across a diverse range of income levels and cultures. Even neuroimaging studies have shown that prosocial spending activates the mesolimbic pathway, the brain’s reward system, resulting in feelings of joy.
Acts of giving are deeply ingrained in our social fabric and promote feelings of social connection, kindness, and gratitude. So, buying a coffee for a friend or donating to a charity you care about could boost your happiness more than expected.
- Using money to buy time
In our fast-paced, multi-tasking world, time has become an increasingly scarce commodity. Feeling rushed or pressed for time can lead to stress, unhappiness, and reduced well-being. From one perspective, Silicon Valley became rich by intruding on your time – Facebook, YouTube…. You get it. But recent research suggests that using money to buy time – for instance, by hiring a housekeeper or paying for a food delivery service to free up your time – can increase life satisfaction.
In a study by Professor Ashley Whillans at Harvard Business School, people who spent money to buy themselves time reported higher levels of happiness than those who purchased material goods. This effect was seen regardless of income level.
Buying time essentially means outsourcing tasks you dislike, which frees up time to engage in activities you enjoy or are meaningful to you. This could include spending time with loved ones, pursuing a hobby, or simply relaxing – not on more screentime. Buying time can significantly improve happiness and overall life satisfaction by reducing time-related stress.
Prefer experiences over material goods. Research has found that experiences are the way to go if happiness is your end goal.
The science of happiness
Happiness is an emotion and like all emotions, it’s got to do with the brain. The neurotransmitters dopamine, serotonin, and oxytocin, also known as “feel-good” hormones, play a significant role in creating happiness and joy. Therefore, activities that stimulate the production of these neurotransmitters can enhance our sense of well-being.
- Investing in learning and self-growth
Life-long learning and self-improvement often lead to personal growth, self-confidence, and a sense of achievement, all contributing to happiness. This could be as simple as buying a book or enrolling in an online course. It could also involve hiring a personal coach or therapist to work on unique challenges or mental health issues.
Research has shown that people who continuously learn and challenge themselves are likelier to be happy and satisfied with their lives. This is because learning new things can boost dopamine production in our brains, leading to increased motivation and enjoyment. It also provides a sense of purpose, offering us a reason to be enthusiastic about the future.
- Health and wellness
Investing in your physical health and wellness can also significantly contribute to your happiness. This could involve spending on a gym membership, buying nutritious/organic food, or investing in a good mattress for better sleep.
Physical exercise has been found to stimulate the production of endorphins, the body’s natural mood lifters. A healthy diet can regulate the production of serotonin, a hormone crucial for maintaining mood balance. We also know that good quality sleep is essential for regulating various neurotransmitters and hormones, including dopamine and serotonin, thereby playing a significant role in mood regulation and overall happiness.
- Quality relationships
Just like love, you cannot directly buy relationships, but you can invest in experiences that strengthen your bonds with others. Going for a meal with a friend, planning a family vacation, or even surprising a loved one with a thoughtful gift can enhance relationship satisfaction, which is closely linked to happiness.
Research has consistently found that social connections and quality relationships are the most significant contributors to happiness. Thus, using money to nurture and celebrate these relationships can boost substantial satisfaction.
- Spending on hobbies and interests
Passion, interests, or hobbies are beautiful avenues for spending money that can add joy and satisfaction to your life. Whether buying a comfortable pair of running shoes, investing in a quality instrument, purchasing art supplies, or buying the latest gaming console, such purchases allow you to engage in activities you love and bring you happiness.
Engaging in hobbies or activities, you are passionate about releases dopamine, the neurotransmitter associated with feelings of pleasure and satisfaction. Moreover, these activities can provide a sense of fulfillment, create a positive distraction from everyday stresses, and offer opportunities for mastering new skills, all of which contribute to a greater sense of well-being and happiness.
- Investing in personal comfort
A comfortable living and working environment contribute significantly to our happiness. The aesthetics of our surroundings, along with comfort levels, directly impact our mood and productivity. Investing in comfortable and functional furniture, pleasing décor, or even ergonomic work tools can create a positive and comfortable environment that fosters happiness.
Multiple studies have shown that the state of our physical environment can affect our mental well-being. A clean, organized, and comfortable space reduces stress and boosts productivity and satisfaction.
Similarly, flying business class can be more comfortable and restful.
- Caring for mental health
Even as we assign much importance to physical health, mental health is often short-changed. Caring for mental health could include spending on therapy or counseling, mindfulness apps, stress-management courses, or self-help books.
Investing in your mental health can lead to better emotional self-regulation, increased self-awareness, improved relationships, and overall increased life satisfaction, all directly contributing to happiness. In stressful times, particularly post-Covid, focusing on mental health and wellness can be a proactive approach to ensuring your happiness and well-being.
Finally, pursuing happiness is a personal journey. It is not a one-size-fits-all scenario. What brings joy to one person may not necessarily bring joy to another. What we need to learn is to shift the focus from materialistic purchases to those that create value, improve quality of life, foster relationships, and enhance personal growth. Remember, the goal is to use money to boost happiness rather than seeing it as a source of joy.
With inputs from an article by Holly Burns on New Trader U
Climbers picture courtesy: Infinity Adventure, Nepal/Pexels. In flight picture courtesy Qantas.
