Spend money on others and share the experience

The best deal: Spending money on a holiday is better than buying a new TV.
The best deal: Spending money on a holiday is better than buying a new TV.

Last week I discussed research that supports the idea that those people who think money can’t buy happiness don’t know where to shop.

Instead of not knowing where to shop, though, the research suggests it’s how we shop, or rather how we choose to spend our cash, that determines the return on investment. Rather than buying a ‘thing’, the evidence suggested you were much better off buying a service and therefore giving yourself some precious time.   

James Wallman in his book Stuffication explores this further and suggests that rather than buying things, we should perhaps consider spending our money on experiences. He suggests that rather than spending $1000 on a newer TV, $1000 on a holiday is a better option for longer term happiness. Interesting, as I imagine many would think the TV would make them happy every day, and the holiday would come and then be gone. But it seems the opposite is true. The value of the better TV when we are in the shop seeing them side by side seems worth it, but the psychology is that once we have the new TV at home, we like it whether it is the latest model or not and the joy of the difference wears off quickly.  

Yet, the joy of our experience stays much longer. Our experiences are also usually shared with others, growing our connections and, of course, we understand these are the greatest keys to our happiness.  

Michael Norton, Harvard professor and author of Happy Money,  suggests money can buy you happiness – if you spend it on others.  He conducted research where people were forced to be pro-social with their money and measured their happiness. When compared with people who spent money on themselves, these people were happier, regardless of the amount they spent or what they did with it. The researchers found that people who gave money to charity were happier than those who didn’t. Teams who chose to spend money on the team activity (not themselves) do better as a team.  

So, if you think money isn’t buying you happiness, you should consider not spending it on a thing and instead spend it on outsourcing tasks in exchange for time, an experience for yourself or, even better, spend it to benefit other people as it will benefit them and also benefit you.  

Tarnya Davis is a clinical and forensic psychologist and principal of NewPsych Psychologists. Her book of columns, All Things Considered, is sold at theherald.com.au