Guest Post from Hazel Garcia
Most of us know what we like and don’t like. Shiny new iPad? Like. Big tax bill? Don’t like. Trip to Hawaii? Heck yes! Commute to work? Ughhh.
Seems simple enough right? We don’t really need science to tell us what we like and don’t like. But out of those things we like, how do we know if they actually bring us happiness? And assuming they make us happy, how long does that happiness last? Given that most of us have limited money to spend on things we like, how do we spend our hard earned disposable income in a way that will bring us the most happiness?
It turns out, research shows that we’re notoriously bad at predicting what will and will not make us happy. Studies show that, when resources are limited, most people would believe that buying a material object will bring them more happiness than spending that money on a 1 time experience, like a vacation or a concert.
But research actually shows that spending money on the fleeting experience actually brings us more long-term happiness than buying a physical object, even though we can hold onto that object for years.
So while we usually trust our gut when it comes time to spend money on things we like, maybe we should actually trust science. We put together a visual summary below of some of the science behind how we spend money and its relationship with happiness, and why it makes us happier to spend our hard earned dollars on experiences, rather than things.
If you’re not yet in a place in life where you’re feeling financially stable, you might also want to consider deferring spending altogether and saving more of your hard earned dollars, since having a base level of financial freedom has also been shown to increase happiness. But that’s a topic for another post!