But will it make you happy?

Most people know that I hate reading. I know many people enjoy reading, but for me I’d rather get my stories from movies and audiobooks and get my information from podcasts and lectures.

That being said, this is definitely an article worth reading: from the NY Times, titled But Will It Make You Happy?. It talks about some recent research that suggests there are clear ways to spend your money to maximize happiness.

The article goes into more detail about how industries have strategized based on this information, but here are the excerpts that stood out to me:

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On the bright side, the practices that consumers have adopted in response to the economic crisis ultimately could — as a raft of new research suggests — make them happier. New studies of consumption and happiness show, for instance, that people are happier when they spend money on experiences instead of material objects, when they relish what they plan to buy long before they buy it, and when they stop trying to outdo the Joneses.

. . . “This actually is a topic that hasn’t been researched very much until recently,” says Elizabeth W. Dunn, an associate professor in the psychology department at the University of British Columbia, who is at the forefront of research on consumption and happiness. “There’s massive literature on income and happiness. It’s amazing how little there is on how to spend your money.”

. . . So just where does happiness reside for consumers? Scholars and researchers haven’t determined whether Armani will put a bigger smile on your face than Dolce & Gabbana. But they have found that our types of purchases, their size and frequency, and even the timing of the spending all affect long-term happiness.

One major finding is that spending money for an experience — concert tickets, French lessons, sushi-rolling classes, a hotel room in Monaco — produces longer-lasting satisfaction than spending money on plain old stuff.

“ ‘It’s better to go on a vacation than buy a new couch’ is basically the idea,” says Professor Dunn, summing up research by two fellow psychologists, Leaf Van Boven and Thomas Gilovich. Her own take on the subject is in a paper she wrote with colleagues at Harvard and the University of Virginia: “If Money Doesn’t Make You Happy Then You Probably Aren’t Spending It Right.” (The Journal of Consumer Psychology plans to publish it in a coming issue.)

Thomas DeLeire, an associate professor of public affairs, population, health and economics at the University of Wisconsin in Madison, recently published research examining nine major categories of consumption. He and Ariel Kalil of the University of Chicago discovered that the only category to be positively related to happiness was leisure: vacations, entertainment, sports and equipment like golf clubs and fishing poles.

Using data from a study by the National Institute on Aging, Professor DeLeire compared the happiness derived from different levels of spending to the happiness people get from being married. (Studies have shown that marriage increases happiness.)

“A $20,000 increase in spending on leisure was roughly equivalent to the happiness boost one gets from marriage,” he said, adding that spending on leisure activities appeared to make people less lonely and increased their interactions with others.

. . . Current research suggests that, unlike consumption of material goods, spending on leisure and services typically strengthens social bonds, which in turn helps amplify happiness. (Academics are already in broad agreement that there is a strong correlation between the quality of people’s relationships and their happiness; hence, anything that promotes stronger social bonds has a good chance of making us feel all warm and fuzzy.)

. . . “We buy a new house, we get accustomed to it,” says Professor Lyubomirsky, who studies what psychologists call “hedonic adaptation,” a phenomenon in which people quickly become used to changes, great or terrible, in order to maintain a stable level of happiness.

Over time, that means the buzz from a new purchase is pushed toward the emotional norm.

. . . Scholars have discovered that one way consumers combat hedonic adaptation is to buy many small pleasures instead of one big one. Instead of a new Jaguar, Professor Lyubomirsky advises, buy a massage once a week, have lots of fresh flowers delivered and make phone calls to friends in Europe. Instead of a two-week long vacation, take a few three-day weekends.

. . . In fact, scholars have found that anticipation increases happiness. Considering buying an iPad? You might want to think about it as long as possible before taking one home. Likewise about a Caribbean escape: you’ll get more pleasure if you book a flight in advance than if you book it at the last minute.

. . . A study published in June in Psychological Science by Ms. Dunn and others found that wealth interfered with people’s ability to savor positive emotions and experiences, because having an embarrassment of riches reduced the ability to reap enjoyment from life’s smaller everyday pleasures, like eating a chocolate bar.

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All of this is especially timely and relevant for me now that I’m financially independent (and realizing how poor I am without student loans). I’ve had this idea for the past couple years that it’s better to spend my money on experiences (partly inspired by kjkuffle’s family and their spending habits), and now this definitely reinforces my inclination. Being a fact-oriented person, it’s nice to know there’s some research behind it too.

So my main takeaways from the article that I want to apply to my life:

  • Rather than spending money on things, spend that money on experiences
  • Wait longer to buy things that I want
  • Amidst the material goods and paid-for experiences, always relish the simple pleasures

Oh, and if I can’t find a wife, I can spend $20,000 on leisure and be just as happy. Just kidding… I hope.

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~ by izikoosumohdum on January 31, 2012.

One Response to “But will it make you happy?”

  1. Another excellent posting. The article, for me, reinforced some good habits and has made me reconsider other more indulging ones.

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