How to Buy Happiness

It is possible to buy happiness, but it comes down to how you spend. Give to others and choose investments that give you more free time or special experiences.

Research from psychologists suggests material goods — a new TV, that Apple Watch you’ve been eyeing — have less of an effect on overall happiness and life satisfaction than you might expect.

For years, psychology research seemed to back up the old saying that “Money doesn’t buy happiness.” Since then, the picture has grown more complicated.

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One study found that once you reach the point where you don’t have day-to-day money worries, more money won’t increase your day-to-day happiness.

But later work, drawing from in-the-moment reports on emotions from more than 33,000 participants, found that people with higher incomes reported more positive feelings. There was also no cut-off for which that was no longer true. (Researchers used an app called “Track Your Happiness,” with several randomized check-ins daily.)

The true message may be that money does buy happiness, if you have money and spend it correctly. But that doesn’t mean buying big-ticket possessions.

It more likely means spending money on others and dedicating time to activities that don’t bring in more income. It’s easier to do both when you have money.

Will possessions bring you more happiness?  

The problem is that we live on a “hedonic treadmill,” according to Sonja Lyubomirsky, PhD, a professor of psychology at the University of California, Riverside, and the author of “The How of Happiness.”

We take a new, bigger TV for granted after a few months. Then, it’s human nature to want something else — a nicer car, a better couch. The cycle is never-ending unless we consciously choose to short-circuit it. (Lyubomirsky suggests cultivating gratitude for what we have.)

If possessions don’t ensure happiness, researchers have clues about what will. In “Happy Money: The Science of Smarter Spending,” professors Elizabeth Dunn and Lara Aknin of the University of British Columbia and Michael Norton of the Harvard Business School, suggest five financial guidelines to follow for greater well-being.

Buy experiences

“In study after study, people are in a better mood when they reflect on their experiential purchases, which they describe as ‘money well spent,’” Dunn and Norton write.

So, the next time you’re tempted by a shiny new gadget, consider whether an experience might not offer a better happiness return. Whether it’s learning quilting, diving with dolphins, or traveling to Costa Rica, rich life experiences are likely to give you more satisfaction over time than a material purchase. But, of course, those activities all cost money.

Make it a treat

Limiting access to valued goods helps us appreciate them more, Dunn and Norton have found. Make an afternoon latte or new sweater an occasional indulgence, rather than a habit.

Buy time

Before you buy a good or service, consider whether it will improve how you’re able to use time, Dunn and Norton suggest.

In one classic study, commuters experienced lower overall well-being than people in similar circumstances without long commute times.

“Use money to buy yourself better time,” Dunn told The Wall Street Journal. “Don’t buy a slightly fancier car so that you have heated seats during your two-hour commute. Buy a place close to work, so that you can use that final hour of daylight to kick a ball around in the park with your kids.”

Nowadays, you may be able to work remotely, but don’t underestimate the value of light conversation with colleagues, which also is linked to happiness.

Pay now, consume later

Anticipation is often the sweeter part of consumption, Dunn and Norton write. Waiting even a moment for something increases the pleasure we feel when we do finally get it, their research shows.

Vacations, for example, provide the most happiness before they happen — because we look forward to them. You can tweak this principle by paying for purchases in advance.

The silver lining is that paying up front means you’re likely to spend less, which could help you pay down debt — a major life stressor, Dunn and Norton say.

Invest in others

Another counterintuitive, no-fail technique: Give to others.

Surprisingly, the happiness boost that comes from giving to others is greater than doing something for ourselves. In studies at the Harvard Business School, those who spent $20 on someone else were measurably happier than those who spent it on themselves.

You can volunteer for a cause you care about, donate to your alma mater or another organization close to your heart, or simply make it a habit to give away $5 a week however you choose.

It’s smart to give in ways that are proportional to your income, but in studies even those who were struggling to make ends meet experienced a happiness boost after helping others.

Ultimately, the emerging science of well-being suggests happiness isn’t about the things you have, but about how you feel day to day. Being kind to others (not just spending money on them) boosts happiness.

Take care of yourself

Research shows that getting enough sleep and exercise are linked to positive moods. If you think you don’t have enough time, ask yourself if you can drop goals or obligations that aren’t in your best interest.

Eating well is also linked to well-being. We think that sweets make us happy, but research has found that eating fish, fruits, and vegetables boosts mood. Take the time to prepare healthful meals and connect with friends and family.

If you feel your financial life is too difficult for you to take advantage of any of this advice, at least for now, here is something to hang onto: Most people naturally become happier during the second half of their life.

That may be because they have more time or choose to focus more on “the simple things in life.” All over the world, in rich countries and poor ones, people get happier sometime after 50.  

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