How to spend your money for maximum happiness

The debate about how material belongings can get in the way of our happiness dates back hundreds of years:

• The Buddha talked about a balance between asceticism and pleasure.
• Early Christian monasticism preached spiritual transformation through simple living.
• Philosopher Lao Tzu warned that if you chase after money, “your heart will never unclench.”

Today, the question of whether money can bring us happiness remains a subject of intense debate.

The things we buy might make us happy in the moment, but that feeling fades away over time. This phenomenon is called the “hedonic treadmill."

We get used to things that we have, and when new, more attractive things catch our eye, we feel like we need to keep getting more stuff to maintain those feelings.

• Happiness is a really difficult topic to study, because it’s subjective, unstable, and intangible.
• Affluence has a certain impact on our well-being when it comes to satisfying our basic needs and standard of living, but in general, research shows that it is a weak predictor of happiness.
• Researchers agree on is this: there are ways to spend our money that are more likely to elicit joy.

Time famine is something experienced by people across all income levels.

People who feel time-constrained are more stressed, less likely to spend time helping others, and less active. This is also one of the main reasons people give to explain why they’re not exercising regularly or eating well.

Buying time can increase our sense of control and, ultimately, our feelings of well-being. For example: hiring someone to clean the house for us, ordering takeout instead of cooking, or paying extra for a direct flight.

But we are less likely to benefit from buying time when we focus on its economic value (something we’re more likely to do if we have less money to spend).

People who think of their time as a limited resource are more likely to derive joy from life’s simple pleasures (talking to a friend for example).

Also, if you’re spending money on a time-saving purchase, use those extra minutes to do something that lifts your mood.

• Even this may not sound like a practical thing to do, an intangible experience can often bring you joy for longer than a physical object.
• Experiences are short-lived, but not in a psychological sense. They live on in our memories, they live on in the stories we recall and tell - they get more satisfying over time, but material goods only decrease.
• We also get boosts of pleasure from planning and anticipating experiences (vacations, for example).
• Another benefit of investing in experiences is that they inspire us to engage in more altruistic behaviors.