Money doesn't always buy happiness, so they say! (Although, I wouldn't know, having not yet experienced the money part of the equation….). Dunn, Aitkin and Norton (2008) posit that the way we spend our money may be at least as important as how much we earn.
In a study by Dunn, Gilbert and Wilson (2011), the authors outlined several key concepts which underlie why spending doesn't always bring happiness and provided some key learnings to help us get more "value" from our money.
1) Purchasing of experiences brings more happiness than the purchasing of material goods. Think about the happiest moments you've experiences in the past year.... Did they include "that time you bought that fabulous $200 sweater you wore once, then shortly ruined after misreading the dry clean only tag!?" or were they the memories you shared with friends... An overseas trip, a Bruce Springsteen concert or learning to scuba dive...
2) Many small pleasures trump excessive large ones - savouring a small piece of chocolate is often far more satisfying than gorging on the whole box. A special treat like a good coffee, a delicious cupcake, a massage or a night out will bring you far more satisfaction than a whole box of cupcakes or having a night out every night of the week. One new handbag will probably bring you more happiness than 10 new handbags.
3) Delay consumption!! The anticipation of a new purchase makes it all the more exciting. As adults, no one tells us what we can and can't have. Without setting our own limits, it's easy to fall into an "I want it all, now!" trap. By delaying purchases, we are better able to consider the value of that purchase and are more likely to make a wiser choice. It also means that when we do make a purchase, that it's all the more satisfying!
4) Using money to benefit others brings us more happiness than using the money to benefit ourselves. Dunn, Aitkin and Norton (2008) conducted a study where people were randomly assigned to spend money on either themselves or others. Participants assigned to spend money on others experienced greater happiness than those assigned to spend on themselves.
Stay tuned for part 3 - Practical Tips to Curb Shopping Addiction