Reality Check: Choosing Happiness from your Money

There are many more important things than money: health, family, relationships, personal growth, just to name a few.

Money isn’t even mentioned in the choice theory list of five basic needs: security/survival, love/belonging, power, freedom, and fun. However, while money doesn’t buy happiness, money certainly helps.

For example, if you don’t have the money to satisfy your basic security/survival needs, then even a little more money can make a huge difference. It’s also easier to find ways to satisfy our other basic needs when we have some discretionary funds.

With money, we can build our love/belonging by hosting a family dinner. Satisfy our power need by joining a health club. Feel the freedom of a weekend getaway. And with enough money, we have all kinds of choices to satisfy our need for fun.

Don’t get me wrong; we can satisfy those needs in creative, non-monetary ways too. But money gives us options.

The approaching Christmas season highlights money even more. We are encouraged to spend—to help the economy and to shop locally to help local entrepreneurs. Charitable donations are heavily promoted in this season of giving. There’s also the other view, encouraging frugality and cautioning against overspending.

This prompted a question for me: why do some people of moderate means appear to get true joy from their money, while others don’t seem to be joyful even though they have more substantial means?

I found some potential answers in a paper appropriately titled, “If Money Doesn’t Make You Happy Then You Probably Aren’t Spending It Right.” It sounds a little bossy, but it offers interesting information. Among the authors is Dr. Elizabeth Dunn of UBC, who studies the role that money plays in happiness.

One recommended principle is, “Buy many small pleasures instead of few big ones.” As money is a finite resource, if we’re spending it on one thing, we’re not spending it on something else.

You are more likely to succeed in using your money to enhance your happiness if you choose relatively small indulgences that you can have frequently rather than big purchases that you have only rarely.

For example, hang out with your friends every week while you enjoy the really good craft beer; you combine the joy of being with others with the pleasure of the brew. And you get a happiness boost every week. Or choose the premium ice cream and feel indulged and happy whenever you eat it.

Contrast those frequent inputs of joy with the happiness you get from, for example, buying an expensive coffee table. It brings you novelty and joy initially but not too long after, it becomes well…just part of the furniture.

You may have heard the phrase, “The banquet is in the first bite,” which Dr. Dunn illustrates by comparing the happiness of cookie-eating. Eating a 12 oz. cookie doesn’t bring us double the happiness of a 6 oz. cookie. We’ll get more total happiness by eating the two small cookies in two separate experiences.

Think of initial momentary experiences—the first time you set eyes on an old friend after a long absence, your first look at the ocean after you’ve been away, or that first taste of cheesecake. The biggest joy comes from the first bite.

So if you want to increase the happiness you get from spending your money, you may be wise to choose purchases or experiences that can give you a small boost on a frequent basis, rather than expecting that a large purchase will bring ongoing happiness.

What strategies do you find bring you happiness from your money?

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