Can money Buy happiness?
A recent article by Michael Norton adds some light to the often considered subject – can money buy happiness? Or more importantly, the question asked in western society- why do I feel like I am going backwards as I earn more and more money.
The research suggests that money often doesn’t buy us much in the way of happiness — not because it can’t, but because most of us aren't spending it the right way.
You probably spend the vast majority of your money on one thing: stuff. Big stuff like cars and houses, medium stuff like TVs and iPhones, small stuff like coffees and snacks.
There’s just one problem with buying so much stuff: all the data suggest that it simply doesn’t make us happy.
So what can we spend our money on to make us happier?
Research shows that experiences — from small date nights to big vacations — are a more reliable source of happiness than stuff. For starters, experiences are more interesting than things while they happen. Think how much more enjoyable an evening out with friends is than one spent sitting plunked in front of a TV.
Very few people think they can afford to pay someone to clean their house. Most feel that it was a luxury they simply couldn’t afford. But everyone feels they can afford a cup of coffee
But do the math: the price of a few cups of coffee every day for a month is equal to how much cash? Many people spend more than $100 each month on coffee.
This failure to use our money to buy better time arises from our general tendency to focus on specific things — I need a coffee right now — instead of thinking broadly about how to allocate our money to maximize our overall happiness. Shifting our money from buying stuff to buying time frees us up to pursue the things that truly make us happy.
Invest in others.
Buying experiences and buying time both involve shifting from buying stuff for ourselves to buying things more valuable for ourselves. In addition to changing what you buy, think about changing for whom you buy.
Experiments and research shows people who spend on others are happier. And this is true all over the world, even in very poor countries. At a very fundamental level, spending on others gives us the “warm glow of giving.”
Still think money can’t buy happiness?
Then you’re probably just not spending it right. If you'd like to try an experiment on yourself, break your monthly spending into “happiness categories.” Allocate enough of your cash to buying time, buying experiences, and investing in others. Making sure to do this at the end of each month will allow you to wring the most happiness out of every cent you spend.