There’s a battle that we often face when it comes to our finances. Spend it on possessions or spend it on experiences? Which is the best route?
Research done by Elizabeth Dunn and Michael Norton, academics and authors of Happy Money shows that though many fantasies of wealth involve fancy homes, cars and wardrobes, the satisfaction that comes with these possessions actually wears off pretty fast and what you’re left with is a feeling of guilt and a search for the next thing to make you happy.
So what should you do? Focus on experiences when you’re spending your money. It can be a new vacation spot or trip, a dining event to remember or a basic date to an amusement park or winery. According to Dunn and Norton, these experiences translate into more happiness because they’re associated with memories – which typically involve those you love and enjoy spending your time with. Here are 5 ways to gear your spending towards your happiness.
5 ways to gear your spending towards your happiness
Spend money on others
Whether it’s buying a latte for the next person in line at Starbucks, donating to a cause dear to your heart, or purchasing a meaningful gift for a friend or family member; the feelings associated with doing something good for someone else can outweigh the satisfaction of spending money on yourself.
Practice delayed gratification
Think about when you last booked a vacation. If it was couple months into the future, chances are you were pretty excited about the prospects and all the fun you were going to have leading up to the time you leaft. Who knows if the vacation actually lived up to your expectations, but chances are you were pretty happy thinking about it while waiting to embark.
Book your trips now – and don’t just think about large vacations – day trips can fall into this category as well! but wait a bit until you actually leave. This will translate into extended periods of happiness.
Choose experiences over possessions
Chances are it’s the times spent with friends, family, out to dinners, on European or tropical vacations, hiking, game nights and more that we’ll look back on to make us happy. When spending your money, keep this in mind.
If you are spending your money on possessions, try to make them a part of experiences such as playing dress up with your daughter in the new clothes you bought, or using your new laptop to launch a side business pursuing your passion. The experiences tied to the possessions we purchase can give us more happiness from the money spent.
Focus on the little things
Instead of saving up for one big trip in the summer, why not take three smaller trips throughout the year? Or instead of quitting your latte habit completely – why not indulge once a week to make it a sweeter experience?
The pleasant smaller experiences we have on a more consistent basis can translate into a larger happiness effect in the long term.
Invest in yourself
Consider investing your money in your personal growth.
Whether it’s taking guitar or cooking lessons, learning a new language, starting kickboxing or taking improv classes at a local theater, spending your money on personal development will allow you to feel more satisfied and happier in your life as you achieve new milestones and gain new skills.