Money Can Buy Happiness, Part II
I’m currently reading a book called Resisting Happiness, which is about the many ways we prevent ourselves from reaching our full potential, mainly due to what the author terms “resistance” (procrastination, inertia, self-doubt, etc.). Apparently, this book has raised my antennae for other happiness-related items, because I ran across this article recently as well. It reminded me of a post we wrote for this blog in December 2014 entitled, “Money CAN buy happiness- Here’s how…,” which we’ve included at the end of this post. The main takeaway from the linked article is that spending money to save time can reduce stress and increased happiness. This same phenomenon is not seen when spending is focused on material goods.
My wife and I have two young kids and time is always at a premium, as other parents can attest. And I hear it gets worse once they get involved in all kinds of activities! Anyway, we made the decision several years ago to hire a house cleaner and a lawn service because both tasks are time-consuming, and we’d rather spend this time with our kids, or friends, or doing something we enjoy. Chances are you have a task that you don’t like doing very much, and if so, consider outsourcing it. You’ll likely make yourself happier in the process.
There are other ways to increase your happiness with money. These include focusing on experiences rather than material goods, spending money on others rather than yourself, and creating pockets of indulgence rather than constant consumption of a good. We think this post is worth sharing again…
Money CAN buy happiness – Here’s how…
If art is in the eye of the beholder, then we’d argue happiness is as well. Research has shown that by allocating your dollars in certain ways you can “buy happiness,” at least incrementally. We understand this won’t appeal to everyone, but here are four themes where this rings true:
- Experiences over stuff – My wife and I like to travel and before we had our daughter we were able to do a fair amount of it. In 2009, we had some of the most amazing food and wine in the hill towns of southern Tuscany. We reminisce about it often. Experiences have a much longer and stronger appreciation value than do material goods. In many cases, the sense of appreciation from an experience grows as time passes. That memorable trip you went on with your parents or grandparents, who are now deceased, probably falls in this category. One reason why experiences trump “stuff” is because humans quickly adapt to the status quo. A new product is only new for a short time, so the satisfaction we get from it diminishes as time passes. Another reason is that experiences tend to be deeply personal. When someone says, “well I went to Italy and had a better meal than you did,” it’s kind of tough to measure that. Focus on experiences, whatever that means to you.
- Others over self – Spending money on others can have a longer-lasting and stronger impact than spending money on yourself. Some of our clients have “adopted” a family during Christmastime, buying gifts for them anonymously and giving them a Christmas they otherwise wouldn’t be able to have. The clients related to us the impact it had on them to see the excitement on the children’s faces when they delivered the packages. This is merely one example of how spending money on others can lead to a higher level of happiness.
- Buy yourself time – When my wife and I bought our house we decided to save some money by doing a lot of the typical cosmetic upgrades ourselves. This meant painting, which I pretty much loathe. With copious amounts of TED Talks and audio books, I survived and the walls were painted. A few years ago, we decided to change the wall colors and we hired a professional painter to do it. I put this in my “best money ever spent” category because it freed me from hours of doing something I didn’t particularly enjoy, and allowed me to reallocate that time elsewhere. You probably have a similar experience, where hiring it out or delegating it has had a similar impact. Time is finite. Wherever and whenever you can buy yourself time to do what makes you happy, you should deeply consider doing so.
- Keep marginal utilities high – About seven years ago, I traveled to China with my wife. Over the course of 10 days we ate only Chinese food for lunch and dinner. Granted there were many different varieties, but it was still what we considered Chinese food. In Shanghai on the 11th day we finally broke down and went to a McDonald’s. A quarter pounder with cheese never tasted so good! Economists call this effect the marginal utility of a good. In most cases, the more we consume something, the less positive the impact it has on us. The 10th day of Chinese food is much less satisfying than the first. By spreading out indulgences (large or small), we have a better chance of keeping the marginal utility (and our happiness) higher.
We get that we’re all wired differently. Some of this might not be for you, and that’s okay. But by focusing your spending on experiences and on others, by buying yourself time, and keeping your marginal utility high, we think you can buy yourself some happiness. If you have enjoyed happiness as a result of one of the themes above (or something else entirely), we’d love to hear about it. We’re always looking for future article ideas, and as you would expect, everything will be kept confidential. — Jon S.