Money doesn’t buy happiness, right? Harvard psychologist Daniel Gilbert disagrees. “It’s a beautiful and popular idea,” he writes in a paper . “But almost certainly incorrect.”
If money doesn’t make you happy, then you probably aren’t spending it on the right things, he says. But how should you spend it?
Does money make you happy or not?
Daniel Gilbert agrees: money buys happiness. He wrote a paper on it with Elizabeth Dunn of the University of British Columbia and Timothy Wilson of the University of Virginia. Money offers an “opportunity for happiness,” they say, because money allows people to live longer and healthier lives, have free time, and control what they do each day.
But, say the three authors, it does matter what you spend your money on.
1. Spend money on experiences, not stuff
You may have experienced yourself that spending money on experiences leads to more happiness than spending money on things. Although a new gadget or a new car does provide a brief feeling of happiness, it quickly becomes part of your normal life. And that while a holiday, a concert or another experience will provide good memories for a long time to come, the authors say.
2. Spend money on others instead of yourself
Brain scans show that spending money on other people activates the reward centers in your brain. And actually that’s not surprising. You feel good when you can help others (humans are social creatures) and just like with experiences, you can live on this feeling longer than if you buy a new iPhone.
3. Make lots of small expenses instead of a few big ones
We mentioned it just now, but we always quickly get used to the stuff we have around us. After a while, major expenses like a new sofa become normal. Your new iPhone will be a regular smartphone again after a few weeks.
Because we simply do not have an unlimited amount of money in our savings account, the authors therefore recommend that you make a lot of small expenses. “Perhaps we can better spend our limited…