Spending money wisely can make you happier
Can money buy happiness? My view focuses on semantics, and specifically the word “buy.” I’ve known many people with enormous amounts of money who are very unhappy, so I don’t believe money can buy happiness. However, I am convinced that spending money wisely can make you happier.
Psychologist Daniel Gilbert said, “Money itself doesn’t make you happy. What can make you happy is what you do with it.”
What does research tell us about increasing our happiness? The field of positive psychology provides clues and helps us prioritize how we can spend our money to become happier.
1. Maintain relationships with friends and family. Buy experiences.
The Harvard Study of Adult Development has spanned over 85 years and is still going strong. It began in 1938 and now includes three generations and over 1,300 participants. Originally intended to study human health and what makes people thrive, the study morphed into research about happiness. The directors summarized their findings in a 2023 book, “The Good Life,” as “Good relationships keep us happier, healthier, and help us live longer.”
How can you spend money to strengthen relationships with friends and family? If you can afford it, consider organizing a family gathering, and help pay for other members to attend. Or do the same with a group of friends. Or call a friend or family member and suggest a day trip to a nearby town, or plan to meet for lunch or dinner with friends. As we get older, it is common that we lose track of friends, and there is a tendency to become isolated. The lack of interaction with friends and family often leads to declining health and depression. Make the effort to reach out to friends and family members, and make plans to get together. It takes a small amount of effort, but the rewards are immense.
Perhaps you want to get together with neighbors. Spring is here, and outdoor get-togethers can begin. If you have a patio, but you do not have outdoor furniture, consider buying some now. (Spending money to support social gatherings is recommended.) Have friends over for casual summer evenings. Suggest that everyone bring a dish to lighten your workload. The old adage “If you plan it, they will come” is true. Take the initiative and invite neighbors and friends over.
Plan an evening at an outdoor concert or the zoo, and invite friends to join you. Or buy tickets to a baseball game, or plan to meet friends for a hike in the mountains or a walk in your neighborhood. Arrange to take a cooking class with friends.
2. Maintain your health.
Lifespans are becoming longer, and many people are living into their ‘90s. However, a long life is only worthwhile if you maintain your health and can enjoy the extra years. How can you spend money on your health?
Buy high-quality medical and dental care. Purchase fresh fruits and vegetables, and avoid highly
processed food (consider visiting a local farmer’s market). Buy home exercise equipment or a gym membership. Treat yourself to a massage, or make an appointment with a physical therapist. Learn exercises to treat your aches and pains — and do them. There are loads of free exercise routines (yoga, dance, stretching) on YouTube. Participate in a sport, such as biking, tennis, baseball or swimming. Take an art class, or learn to play a musical instrument.
3. Give generously to others, and have a sense of purpose
Research has shown that having a sense of purpose as we age can increase our happiness. Giving to others — either with financial gifts or by giving your time — can make you happier. The opportunities to do volunteer work are endless, and if you have some free time, ponder what you may enjoy doing. Try new things and recognize you do not need to make a longterm commitment.
4. Buy “things”
You will notice that buying “things” is not at the top of the list of how to become happier. In fact, decluttering and simplifying our lives can often make us happier than buying more “things.” However, there are plenty of exceptions. If there is something you really have been wanting, you should treat yourself. It may be a piece of clothing or some new shoes. It may be a book, a journal or some cooking supplies. Perhaps you want to brighten your living space with some colorful pillows for the couch. Or buy yourself a new houseplant or a few serving pieces for the summertime outdoor gatherings you will plan.
As Marie Kondo recommends, think about what will bring you joy. This is very different than surfing on Amazon and buying new items compulsively.
To summarize, spending money on experiences that will strengthen relationships with friends and family will make you happier. Focusing on maintaining good health is important for our happiness, and giving generously to those less fortunate than us provides rewards. And, occasionally, treat yourself to something you will enjoy.
Donna Skeels Cygan, CFP®, MBA is the author of The Joy of Financial Security, and her upcoming book Sage Choices. She owned a fee-only financial planning firm in Albuquerque for over 20 years before recently retiring. She welcomes emails from readers at donna@donnaskeelscygan.com. Prior columns are available at donnaskeelscygan.com/articles/