You don’t need more money to live a happier life. Because how much money you make isn’t nearly as important as how you use it. That’s according to the new book Happy Money. It was written by University of British Columbia psychology professor, Elizabeth Dunn and Harvard Business School marketing professor Michael Norton. Here are their scientifically proven ways to spend your money in a way that leads to greater happiness.
- When you’re considering a big purchase, ask yourself how you’ll use it. We tend to focus on isolated uses for items. Like, if you want to buy a bigger TV, you might convince yourself it’ll be great when you’re watching the big game! But what will really end up happening is that you’ll spend countless hours watching singing competitions on that TV – by yourself – and a your old TV would serve the same purpose. So before making a big purchase, ask yourself: “How will I use this purchase next Tuesday?” It’s just an ordinary day – and if it won’t enhance your life on a day-to-day basis, rethink it.
- Most people who want to save up for something big – like a car or computer – will cut back on socializing so they can save up. The book Happy Money says that’s the wrong way to go, because our best moods come from spending time with others. So, although saving money is a good goal, don’t let it limit your time with friends. Find ways to enjoy socializing on a limited budget – or think about whether sacrificing friendships is worth a new car. If not, you may want to cut corners elsewhere.
- Pay up-front whenever possible. There is actual pain related to handing over money. It activates regions in the brain associated with real ‘slammed your finger in the door’ pain. But once something is paid for, you can enjoy it more. Like when you pay up-front for an all-inclusive vacation – those unlimited piña coladas taste that much sweeter.