If we want to increase our happiness through money we should find ways to make more of it so we can buy more of the things that will make us happier, right?
While reasonable enough, that doesn’t seem to work very well. There are plenty of miserable millionaires and billionaires. “Mo’ money, mo’ problems.”
Studies show that people tend to believe that if they make twice as much money they will be twice as happy. It turns out that making $80,000 rather than $40,000 per year results in a meager 9% increase in happiness.
Now, to be fair, that extra money certainly allows us to more easily pay rent, buy food, and afford better, nicer things, but the daily level of happy feelings fades, and soon we are thinking that making more money will surely make us more happy.
But it turns out that once people are earning $100,000 per year, making more than that has little impact on day-to-day feelings of happiness. Stress, anxiety, and depression may go down, but relative happiness remains fairly steady.
Of course, all of this is variable and particular to different sets of individuals. Some people will be unhappy no matter how much money they make, and some will continue a slight rise with increasing wealth.
The critical link between money and happiness is learning to focus on the ways we spend our money rather than devising ways to accumulate more of it.
Sounds simple, right? Yeah, not really.
But what if I told you there were a few shortcuts you could employ to raise your happiness quotient (your HQ) through the power of money?
If you’re ready to unlock the shortcut, let’s get started!
1. Buy the sizzle, not the steak!
Case after case illustrates that experiences are better than things…but why?
Two reasons: 1) we create waves of happiness in anticipation and recollection and 2) we become a vessel of happiness through embodiment.
If none of that makes sense, don’t worry. I’ll explain.
We’ve all felt the excitement of the weeks leading up to our birthday when we were young. We just knew we were going to get that new toy we told our parents about, and we couldn’t wait to open that gift.
Finally, the day arrives, and we open the gift, and it is glorious…for about five minutes and then it is on the next thing.
While we do enjoy playing with the new gift, once we are done playing with it, we soon forget about it. That’s because things bring us happiness when we use them, but not so much when we merely think of them.
Whereas experiences bring us happiness throughout the entire process and beyond. We get excited as we plan our vacation, looking at pictures of the places we’ll see, the things we’ll do, the foods we’ll eat, and during our vacation we actually get to live those anticipated experiences, and then afterwards we reminisce about those activities telling stories and sharing memories months and even years later.
In fact, some experiences may become even more enjoyable upon reflection than in the actual moment.
I remember one summer my girlfriend and I visited Sleeping Bear Dunes National Park in Michigan which is a 3.5 mile hike up and down a dozen or so very large and very steep sand dunes, most of them well over 250 feet high.
We were really looking forward to this hike. The problem was we did not have any of this distance and elevation information going into our little adventure. After scrambling up and over three of these enormous dunes, we realized that we might have made a mistake. We had very little water and no money with us. I left that back in the car. Not my finest moment.
We decided to keep going and I joked that maybe I could barter my watch for a couple of light refreshments when we go to the shore of Lake Michigan, because surely there will be a stand there and we can buy a few drinks and hang out for a while and then head back. Well, after about 90 minutes of very strenuous hiking we finally arrived at the shore. And it was deflating if not completely disappointing.
It was literally just a 10-foot strip of sand at the bottom of the dune. There was not a single chair, stand, or anything resembling life except some sea grass and the ocean-sized lake before us.
Did we enjoy the experience? No, not at all. Do we love telling this story and laughing about it? Every single time. It was a horrible experience that neither one of us would trade for anything material. It is a glorious memory.
And that is because this experience has become a part of us. Embodiment is one of the strongest links to our emotions. It’s easy to do this with experiences, but it is really hard to do with things.
We just can’t do that with a new TV or a new couch (and before you say it, let me clarify that a couch potato becomes a part of the couch, not the other way around).
The point is that experiences stay with us, and our brains continually find new and interesting ways to remember them and enjoy them long after the event has passed.
Your shortcut to increasing your HQ (your happiness quotient):
Spend money on experiences rather than material things.
And if you do decide to purchase something material, try to think about it in a new way.
Think about the item not as something you have, but something you make a part of your life – frame it in the space of how you will experience this item This way each time you use it or even think about it, you will perceive it in the light of experience because it is enhancing your life in some way. For example, if you do buy a couch, think about how you will use it as a refuge of respite after a long day, a space to cuddle with your loved one, a comfortable banquette to enjoy dinner, or the perfect place to nap on a Sunday afternoon.
Remember to increase your happiness, Buy the sizzle, not the steak!
2. Make it a treat.
You’ve probably heard the phrase, “Absence makes the heart grow fonder.” Now, you may not agree with it, but it happens to be true…at least our brains think it is.
Did you know that TV commercials (and those super annoying ones that cut into your YouTube videos) actually make the shows we are watching more enjoyable. Sounds crazy, but it’s true.
People report that they enjoy shows more with commercials inserted than those who are allowed to watch the same show all the way through uninterrupted.
It turns out that we gain greater satisfaction and enjoyment from things when they come in smaller packages and are consumed less frequently.
And this theory applies to more than just binge watching all eight seasons of whatever show your favorite streamer is suggesting for you tonight.
Have you ever noticed how something that was once a treat becomes an arduous errand when we do it over and over day after day? Like when you first had a triple caramel latte at that new mermaid coffee shop back in the 90s? And now you find yourself going there every morning for your super-duper sugar jolt?
Somehow this delightful outing has become dull, routine, and really quite expensive. And you don’t enjoy it nearly as much as you once did. That’s because you’ve adapted to the taste and the venue. Essentially, you’ve become numb to the newness of that once lovely activity.
But you can change all that through the power of interruption. Usually, I would not recommend interrupting, but in this case, it’s the right prescription.
Your shortcut to increasing your HQ:
If you want to maximize your happiness per experience, make it a treat.
Interrupt your routine with intentional rest periods. Providing your eyes, tongue, mind, and body with an intermission, you will start to see an increase in your happiness quotient. Disengaging from your worn-out routine of everyday lattes and four-hour watchapaloozas will give you the opportunity to treat these things like the treats they are.
Our brains love the anticipation of a special reward and the reignited surprise of that first sip or that first laugh. So, do yourself a favor, take breaks between consumption and make it a treat.
3. Buy yourself some time.
We’ve all heard the phrase, “Time is money” which is paraphrased from one of America’s greatest pundits, Benjamin Franklin.
Some folks think time is even more valuable than money because you can always make more money, but time is finite and irreproducible. So, if time is more valuable than money, how can you spend money to make better use of your time?
Outsource your most dreaded tasks.
There are a number of ways you can outsource tasks that can free you up to do more happiness-inducing activities. Housekeeping, car washing, yard work, home repairs, and cooking come to mind.
Your shortcut to increasing your HQ:
Buy yourself some time by outsourcing your most dreaded tasks. And don’t do this lightheartedly. You are not just freeing up time, you are committing to increasing your happiness, so ask this very important question before engaging in any new purchase.
“How will this purchase change the way I spend my time?”
Carefully consider this question so you don’t just fritter away the time you aim to reclaim. If you trade housekeeping chores for TV and social scrolling, you’re probably not getting your money’s worth.
Learning to play an instrument, taking dancing lessons with your sweetheart, or spending more quality time with friends and family are more likely to increase your happiness quotient.
Buy yourself some time and make the most of it!
4. ‘Tis better to give than receive.
Humans are the most social animals on the planet. In fact, we suffer greatly when we do not socialize.
On average, people who do not socialize and build meaningful relationships have poorer physical health, worse mental health, and shorter lives than those who regularly engage with others.
So, what does this have to do with money? Not much.
But it does illustrate that we humans are prosocial, and we thrive when we are around other humans and build meaningful relationships with them.
And this doesn’t need to be a romantic or even a long-lasting relationship. We can help others we know or total strangers and build meaningful relationships by the impact we make. There are two ways we can do this – give time or give money.
And since we are talking about money in this episode, let’s focus on that.
You see, we have the discretion to spend money in one of two ways – we can engage in personal spending (bills, expenses, and gifts for ourselves) or prosocial spending (gifts for others and donations to charity).
Most of us spend much more money on ourselves than we do on others. And that makes a lot of sense. We have bills to pay, mouths to feed, and we feel good about spending a bit of our discretionary dollars on ourselves once in a while.
But what happens when we spend just a little bit of our hard-earned cash on someone else?
A recent study asked college students how happy they felt at the moment, and then offered them an envelope with some money and a note inside. Some students were given five dollars and told to spend the money on anything they wanted for themselves. Other students were given five dollars and told to spend the money on someone else in any way they wanted. To add a wrinkle to the study, some students were given twenty dollars in their envelopes with the same instructions.
At the end of the day, the students were asked how happy they felt right now. The students who spent the money on someone else felt measurably happier than the students who spent the money on themselves even though there was no difference earlier in the day. Surprisingly, this upward happiness trend stayed true for the twenty-dollar experiment as well. Giving away a significant amount of money to someone else felt better than spending it on themselves.
Now, why does this happen? Well, we don’t know for sure, but separate fMRI studies have shown that people choosing to give money away activates areas of the brain typically associated with receiving rewards. This may be due to activation of mirror neurons, which is the phenomenon where we feel what the other person is currently feeling, like the tendency to smile ourselves when we see someone else smiling.
The unexpected finding was that this effect even occurred when people were forced to give money to a charity or other person.
It seems that we are biologically coded to feel good about helping others whether we want to or not.
Your shortcut to increasing your HQ:
Invest in others and reap the return of happiness for yourself.
Spending money on others delivers a win-win engagement. Someone else receives a lift in the form of a surprise gift, and you get the wave of happiness that comes with the gift of giving.
So, how will you decide to spend your next dollar? How will you turn your next purchase into an experience and make it a meaningful part of your life? And how will you buy back some of your own time or decide to invest in others?
These are all tough choices. The thing to remember is that however you spend your money, be intentional about your purchase and understand how it will impact your life or the life of someone else.
Because with the right mindset, money really can buy happiness.