Can money buy happiness?
A group of students from Singapore Management University (SMU) shares with us their insights and findings on the things that make us happy in life. Read on for more details…
“Money never made a man happy yet, nor will it. The more a man has, the more he wants. Instead of filling a vacuum, it makes one.”
Money is such an important part of our lives. One question that has puzzled us for centuries is whether money can truly bring happiness.
Contrary to what Benjamin Franklin proposed, and the popular belief today that money can’t buy happiness, psychological research has proven in recent years that money has the power to bring happiness – only if we spend it right.
Here we bring you four scientifically backed tips for spending money to get the most happiness for your buck:
1. Buy experiences instead of stuff
Research by Professor Edward Diener, also known as ‘Dr. Happiness’, shows that people get more happiness from spending money on experiences than on acquiring new things.
Think about your child’s birthdays over the past few years. How long did the excitement of getting a new present last? And how long did the joy and happiness of a birthday celebration linger? Chances are, your little one went to bed with a smile on her face just remembering all the fun at the party.
Research by Professor Elizabeth Dunn further supports this research. Not only do experiences make us happier, happiness derived from experiences actually tends to last longer compared to happiness from newly acquired purchases.
In addition, although things bring us happiness when we use them, experiences bring us happiness in two ways: when we are doing them and when we simply think about them. Talk about a bargain!
More insights to the question, ‘Can money buy happiness?” – on the next page!
2. Indulge in frequent, small pleasures instead of a few big ones
A key aspect of the science of happiness is the fact that people will inevitably adapt to new delights. Whether it is a new car or a new pair of socks, the happiness we get from our purchases simply wears off with time.
Given that we adapt to even the greatest things that money can buy, it may be better to indulge in more frequent, small pleasures. In fact, research by Professor Diener indicates that happiness is more strongly associated with the frequency rather than the intensity of a positive experience. Eating an entire bar of chocolate once a week will not be as pleasurable as eating a smaller piece of chocolate everyday of the week.
There is nothing wrong with large purchases, but given a finite amount of money, it would be wiser to buy more frequent small pleasures. So eat that piece of chocolate.
3. Delay consumption and enjoy the benefits of anticipation
Imagine a kid in a toy store eagerly clutching a snazzy water gun. Would he be happier if he got it today, or after a week?
Professor Diener’s research shows that getting the water gun a week later will not reduce the intensity of the child’s happiness from the toy. Instead, delaying buying it would provide the benefit of anticipation. The child would probably spend the week getting excited and imagining the fun he would have playing with it.
Indeed, we can derive happiness from just anticipating an upcoming event, even if the event itself is not entirely enjoyable. In fact, people who look forward to enjoyable experiences for some time report being happier in general.
So maybe book your next holiday a few months in advance or leave some presents early under the Christmas tree to allow time for the family to get excited.
4. Avoid comparison shopping
The downside of shopping is that buyers tend to engage in comparison-shopping, be it in physical stores or online websites. When we compare a vast range of available options within a category, it distracts us from focusing on product attributes that are important to us.
What’s more, comparisons we make when we’re shopping are not the same as comparisons that we will make when we consume what we shopped for. Think about this – the difference between the iPhone 5S and iPhone 6 doesn’t seem to matter that much after a while, does it?
We hope these tips will be useful in helping you make your future purchases. Do share with us if you have any comments in the section below!
Dunn, E., Gilbert, D., & Wilson, T. (2011). If money doesn’t make you happy, then you probably aren’t spending it right. Journal of Consumer Psychology, 115-125.
Diener, E., & Biswas-Diener, R. (2008). Can Money Buy Happiness. Happiness: Unlocking the Mysteries of Psychological Wealth (pp. 91-111). Malden, MA: Blackwell Publishing.
Article contributed by: (L-R) Ekta Jagtiani, Nooraisha Osman, Victoria Wong, Ong Xiao Qi and Justin Siau