You’ve probably heard it said that “money can’t buy happiness.” But what if science suggests otherwise? A growing body of research indicates that how we spend our hard-earned cash can impact our overall well-being and satisfaction with life.
This doesn’t mean that chasing material wealth or engaging in frivolous consumption leads to deep, long-lasting happiness. There’s more to it than that. However, multiple studies have identified specific categories of purchases that consistently boost people’s mood and sense of contentment.
So, if you genuinely want to use your money in ways that will enrich your life, consider these five evidence-backed strategies:
1. Choose Experiences Over Things
If you had to choose between spending $1000 on a dream vacation or the latest smartphone, what would bring you more joy in the long run? The data on this question points to experiences, hands down.
Why? Because experiences become deeply embedded in our identity and memory in a way that objects simply can’t. We don’t adapt to experiences as quickly, so the happiness lingers longer. Experiences are inherently social, too, strengthening our relationships. And we don’t tend to negatively compare our experiences to other people’s like we do with possessions.
So next time you’re tempted to splurge on something shiny, consider spending money on travel, concerts, art classes, or memorable outings with loved ones. The anticipation and storytelling fodder will keep paying dividends.
2. Invest in Time-Saving Services
In today’s frenetic world, time is the ultimate luxury. Feeling chronically stressed, rushed, and overbooked erodes our well-being. That’s where “buying time” comes in.
Research shows that spending money on services that free you from mundane tasks – like hiring a housecleaner, outsourcing yard work, or even taking a cab instead of the bus – boosts life satisfaction. It holds whether you’re wealthy or on a tight budget.
Reducing time spent on draining chores opens up space for restorative leisure, nurturing relationships, and meaningful pursuits, which are critical components of living a happy life.
3. Give Money Away
Want to feel instantly richer? Give some of your money to someone else. A growing body of research shows that spending money on others provides a more considerable happiness boost than spending on yourself.
This “prosocial spending” effect has been demonstrated across different cultures and income brackets. In one fascinating experiment, people who were gifted money and told to spend it on others were happier than those told to spend it on themselves.
So look for opportunities to invest in the people and causes you care about. Treat a friend to lunch. Buy a thoughtful gift for your mom. Donate to a vital nonprofit. But make sure it feels intentional and connected rather than like an obligation.
4. Prioritize Your Health
We intuitively know that physical and emotional health are foundational to feeling good. Science backs this up, too – health is one of the strongest predictors of overall happiness.
While a closet full of designer clothes might not make much difference, using your resources to eat nourishing meals, get regular exercise, manage stress through therapy or meditation, and get ample sleep on a great mattress are wise happiness investments.
Being intentional about self-care isn’t selfish or frivolous—it allows you to show up fully to all parts of your life. When your body and mind have what they need to thrive, you’re primed to squeeze more joy out each day.
5. Never Stop Learning
Finally, consider earmarking some of your discretionary income for ongoing education and personal development. Humans are hardwired to keep growing throughout life, and it keeps us vital.
Mastering new knowledge and skills—whether through books, online courses, live workshops, or pursuing a long-held passion like painting or a foreign language—taps into our deep need for growth and progress and expands our sense of possibility.
So think about what lights up your life and invest in exploring it further. Building competence is inherently satisfying; you might stumble into an exciting new career path or side gig in the process.
Case Study: From Materialistic to Meaningful
Ray, a successful accountant, had always believed that the key to happiness was acquiring the latest gadgets, trendy clothing, and luxury items. Despite his high-paying job and endless possessions, he couldn’t shake dissatisfaction and emptiness.
One day, a close friend suggested that Ray shift his focus from material goods to experiences and personal growth. Intrigued, Ray allocated some of his disposable income toward a cooking class he’d always wanted to take. To his surprise, the joy he felt from learning new skills and connecting with classmates far surpassed the fleeting excitement of any purchase he’d made.
Inspired by this realization, Ray began to reevaluate his spending habits. He started prioritizing experiences like travel, concerts, and time with loved ones over accumulating more stuff. He also began donating regularly to causes he cared about and volunteering at a local community center, finding deep fulfillment in helping others.
As Ray continued to invest in experiences, relationships, and personal development, he noticed a profound shift in his overall well-being. He felt lighter, more content, and more connected to the world around him. While he still enjoyed the occasional material treat, Ray now understood that true happiness stemmed from living a life rich in meaning, growth, and shared moments – not just possessions.
Key Takeaways
- Science suggests that how we spend our money can significantly impact our well-being and life satisfaction.
- Spending money on experiences brings more lasting happiness than buying material possessions.
- Using money to buy time, such as outsourcing disliked tasks, can reduce stress and increase life satisfaction.
- Engaging in prosocial spending, like donating to charity or buying gifts for others, provides a greater happiness boost than spending on yourself.
- Investing in physical and mental health, such as through exercise, nutritious food, and therapy, can lead to greater happiness.
- Spending money on education, skill development, and personal growth can increase happiness through a sense of mastery and progress.
- The key to buying happiness is not spending more money but spending intentionally on things that align with your values and contribute to your well-being.
- The most appreciable mood boost often comes from anticipating an experience and savoring the memory afterward rather than the actual act.
- Allocating resources towards relationships, personal growth, and meaningful pursuits is the secret to getting the largest happiness return on your investment.
Conclusion
You’ll notice a common thread among these research-backed happiness strategies: They are not about spending more money but about spending it more intentionally and in alignment with your values.
The most significant mood boost often comes from anticipating the experience and then savoring the memory afterward, not from the actual price tag. So take pleasure in the process. Plan your big wilderness trip for months. Fondly recount the tales from your life-changing volunteer abroad experience. Bask in your post-workout glow.
If money is a tool, consider these approaches as a blueprint for getting the most happiness return on your investment. As you look at your budget, consider how you can allocate your resources – even in small ways – towards the relationships, growth, and meaning that make for a prosperous life.