Excerpts from paper by Elizabeth W. Dunn, Daniel T. Gilbert and Timothy D. Wilson
If money doesn’t make you happy, then you probably aren’t spending it right
The relationship between money and happiness is surprisingly weak, which may stem in part from the way people spend it.
We suggest that consumers should
- buy more experiences and fewer material goods;
- use their money to benefit others rather than themselves;
- buy many small pleasures rather than fewer large ones;
- eschew extended warranties and other forms of overpriced insurance;
- delay consumption;
- consider how peripheral features of their purchases may affect their day-to-day lives;
- beware of comparison shopping; and
- pay close attention to the happiness of others.
On point 2, use their money to benefit others rather than themselves:
Choosing to give money away—or even being forced to do so—led to activation in brain areas typically associated with receiving rewards (Harbaugh, Mayr, & Burghart, 2007).
On point 5, delay consumption:
…there is a second reason why “consume now, pay later” is a bad idea: it eliminates anticipation, and anticipation is a source of “free” happiness. The person who buys a cookie and eats it right away may get X units of pleasure from it, but the person who saves the cookie until later gets X units of pleasure when it is eventually eaten plus all the additional pleasure of looking forward to the event.