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Money CAN make you happy (but only if you don’t buy stuff with it)

7 January 2015 2:30 PM

Can money make you happy? Research proves it can, but only if you give it away or buy experiences instead material goods.

Also read the following related article:

- 13 random thoughts on living a happier, less materialistic life

Can money make you happy?

Wall Street Journal writer Andrew Blackman recently addressed this issue in a column he wrote (click here for the original piece):

“Over the past few years, new research has given us a much deeper understanding of the relationship between what we earn and how we feel. Economists have been scrutinising the links between income and happiness across nations, and psychologists have probed individuals to find out what really makes us tick when it comes to cash. The results, at first glance, may seem a bit obvious: Yes, people with higher incomes are, broadly speaking, happier than those who struggle to get by. But dig a little deeper into the findings, and they get a lot more surprising — and a lot more useful.”

In short, this latest research suggests that wealth alone doesn’t provide any guarantee of a good life. What matters a lot more than a big income is how people spend it.

Experiences are worth more than you think (and “stuff” is worth less)

Numerous studies conducted over the past 10 years have shown that life experiences give us more lasting pleasure than material things, yet people often deny themselves experiences and prioritise buying material goods.

Prof. Howell, associate professor of psychology at San Francisco State University, decided to look at what’s going on.

In a study published early in 2014 he found that people assume purchases of durable material goods offer better value for money than spending on fleeting experiences. So, although they’ll occasionally splurge on a big vacation or concert tickets, when they’re in more money-conscious mode, they stick to material goods.

Yet, Prof. Howell found that, when people looked back at their purchases, they realise the opposite is true: experiences actually provided better value.

Experiences tend to meet more of our underlying psychological needs. They’re often shared with other people, giving us a greater sense of connection, and they form a bigger part of our sense of identity.

If you’ve climbed in the Himalayas, that’s something you’ll always remember and talk about, long after all your favourite gadgets have gone to the landfill.

Don’t adapt to what you buy

One of the main reasons why having more stuff doesn’t always make us happy is that we adapt to it. A raise at work gives you a boost, but only until your aspirations inevitably rise too. You might buy a bigger home in a new neighbourhood, and so your neighbours are richer, and you start wanting even more.

You’ve stepped on the hedonic treadmill.

Trying to prevent that, or slow it down, is really a challenge. One approach that can work is to consciously try to foster appreciation and gratitude for what you have. The process of adaptation, after all, comes from taking what you have for granted, so you can slow it down by reminding yourself of why you value what you have.

Try giving it away

Although earning more tends to enhance our well-being we become happier by giving it away than by spending it on ourselves.

Be sure to buy time too

It’s also important to consider how what you’re buying will affect how you spend your time.

That big house in the suburbs may seem like a good idea, but a 2004 study by the University of Zurich found that people with longer commutes reported lower overall life satisfaction, all other things being equal.

Also read the following related article:

- 13 random thoughts on living a happier, less materialistic life

Listen to the Soundcloud clip for more detail and listeners' responses to questions such as these:

- What is more important; the amount of money you have or what you do with it?

- What experiences have you had recently, while on holiday or taking some time for yourself to reflect, that were worth more to you than the amount of money you were spending?

This article first appeared on 702 : Money CAN make you happy (but only if you don’t buy stuff with it)

7 January 2015 2:30 PM

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