Turns out we can buy happiness, but not in the way you think

Published June 15, 2016   Posted in How to Think

Many of us in the personal finance community have written about the fallacy of buying happiness, arguing that it simply cannot be done. While true in many ways, one remarkable study finds that happiness can be bought with money, so long as we’re not spending that money on ourselves.

Pinterest: Think happiness can be bought? It can, kinda!The study is three years old but provides interesting insight into five key principles that actually generate happiness.

Published by Forbes, a dude named Michael Horton ran a clever study that involved giving a person money and asking them to spend it on themselves. Then, each person was given more money, but this time, they had to give that money away instead of spending it on themselves.

Which task made these people happier?

Demonstrably, giving money away made people far happier and more socially connected to people around them. Conversations were started. Surely, a sense of accomplishment was felt by the giver. Knowing that you brought a smile to someone else’s face is a powerful emotion, more powerful than bringing a smile to one’s own face.

Horton divides the source of happiness up into five distinct areas:

  • Buy Experiences
  • Make it a Treat
  • Buy Time
  • Pay now, consume later (delayed gratification)
  • Invest in others

Without a shadow of a doubt, experiences provide me with more happiness than buying stuff. That helicopter ride I took over the island of Kauai, HI on our honeymoon is an experience that I will never forget. It sure beats the hell out of buying all those miniature model motorcycles that I thought were super cool several years ago.

The less we do more pleasurable things, the more special they become. Dessert feels like a treat to me because I don’t have it at the conclusion of every meal. If I did, it would become “the routine”, nothing special about it…just something that I expect to happen. That’s not happiness.

Time is a critical element of our happiness, and it becomes more and more important the closer we get to calling it quits from work. I want time – time to pursue my hobbies, time to just sit and think, time to enjoy nature. Time is a finite resource, and the better we manage that resource, the happier we tend to be.

I back into spots more often than not. I like the ability to just pull straight out and be on my way when it’s time to go again. Delayed gratification is something that I’ve always naturally done. I guess that’s why my wife and I have lived so frugally over the past several years to retire early.

And it’s true, I get far more happiness out of life when doing something nice for someone else. I will always remember that time I got a job for someone who was looking for work…far more vividly than any of the jobs that I accepted.

Is this truly the recipe for happiness? Actually, it’s pretty darn close to what I would consider that recipe to include. It’s true, human beings do tend to feel more enjoyment when we do nice things for other people, probably because it makes two people happy instead of just ourselves.

And when it comes to being happy, the more the merrier, right?

Investing in others is a remarkable way to increase our own happiness. So is spending money on experiences rather than on things.

It’s question time: What are some things that you do for others that bring you happiness?

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Comments

13 responses to “Turns out we can buy happiness, but not in the way you think”

  1. Apathy Ends says:

    When it comes to long weekends away with friends or family, I am a planner -food, drinks, prepped boat, yard games, anything I think we will need to enjoy the time – while that might not sound like a big deal, you are giving the gift of a care free weekend (and it’s way effing harder than people think)

    Sometimes just getting events planned is draining and time consuming

    If everyone is happy – I am happy

    • Steve says:

      True that, Apathy. Entertaining or planning is a great way to feel happiness, especially if everything turns out right. If everyone is happy, and you planned most of it, then yup – you’re happy too!

  2. I’m not the best at it, but buying gifts for others when they aren’t expecting it brings me happiness. For example, one of my younger siblings and his wife were moving and they asked my help to move them into their new place. Not a fun way to spend an afternoon, but I knew they needed the help so I was happy to do it. And I came with a few house warming gifts. They did not expect it at all and really appreciated the thoughtfulness. And I enjoyed the pleasure of doing that much more than had I even just bought those items for my own use.

    • Steve says:

      Thanks for your thoughts – yeah, especially giving gifts for those who *aren’t expecting it* can definitely put a smile on my face, too. Unexpected treasures can be pretty awesome! 🙂

  3. This s great! And I couldn’t agree more. From the 5-point bullet list, I’ve written a post entitled “Make it a Treat”, another called “Money Used to Buy Stuff, now it Buys Time,” my most recent post is about investing in a young entrepreneur, and I’ve frequently repeated the mantra to buy experiences, not things.

    I haven’t written about delayed gratification, but I’ve certainly lived it, having worked my tail off before getting a real job at age 30.

    Thanks for sharing the insight!

    Best,
    -PoF

  4. Matt Spillar says:

    I completely agree with these five main sources of happiness and your thoughts. I recently wrote a post with my thoughts about the subject of whether money can buy happiness. In essence, I think the main debate I see with my peers is the thought process of “oh, if I just made more money, I’d be happy” or “if I just owned this car, I’d be happy,” etc. They get in this mindset of always needing MORE, and never being content with what they already have. That’s a dangerous way to live, and life is going to pass them up without them even noticing it.

    Money can’t buy happiness in the form of material things. Just how you’ve shared with your own story, you had all the material things you thought you wanted, but something was still missing. Experiences, making a difference in other’s lives, and time are the three things that bring the most happiness via spending money. Those three areas bring great memories and fulfillment, not empty short-term pleasure.

    • Steve says:

      Thanks Matt. You’re right, the happiness equation just *seems* so simple, but in reality, it isn’t. It takes considerably more *meaningful* spending to elicit true happiness. It’s not hard, though – you just gotta do it! 🙂

  5. Mrs. PIE says:

    I remember hearing about this study on NPR when it came out. This was before we really committed to our FIRE plans, but it completely rang true for me. I believe we have always valued experiences, but this put a name and some logic to our love of free outdoor fun instead of paid them parks and ‘stuff’.
    As for doing things for others, I have been volunteering for a couple of years at a local middle school as a ‘science coach’. Ok, admittedly I signed up for my own benefit, because I thought it would be fun. It’s so much more than that though, even to be able to buy a few inexpensive materials for the experiment we will be doing, rather than the teacher having to find the money. It’s fun for me and much appreciated by the school. Win all around!

    • Steve says:

      Thanks Mrs. PIE. Volunteering can certainly be that source of happiness, with the added benefit of completely immersing yourself in the activity. It’s tough to beat that!

  6. Mr. SSC says:

    My smallest thing I do is Smile at people – when I am walking in the hallway at work or even on the street and see people looking grumpry or just beat down and I smile and then they smile back. I get a lot of happiness out of that.
    Also, I donate money monthly to Donors Choose – an organization that lets you pick classroom projects to donate money directly to the techer. They put out their project idea, the cost, and reason behind needing it and you choose which one you want to support. It’s pretty awesome, but I love getting the thank-you cards in the mail, which usually come months later when I’ve forgotten about it. My favorite was getting a whole classroom outfitted with ukeleles so they could learn music. It’s been great seeing pics and getting updates from the teacher, and I remember that and get more happiness thinking about that more than any instrument I’ve ever bought myself.

    • Steve says:

      Smiles are powerful, Mr. SSC! Nothing wrong with that, and they often do work to get people out of their funk. And that’s a very cool charitable cause, too. I hadn’t heard of that one. Good find!

    • Basil says:

      I love smiling at strangers! It’s the most magical thing.

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