June 25, 2018
The Best Way to Spend Your $$$
By Sylvia Salguero
Do you pay a lot of attention to the way you spend your discretionary income?
A more focused approach to spending could potentially add happiness to our lives. This hypothesis was put forth by Elizabeth Dunn in her most recent book, “Happy Money.” The concept looks at how we spend our discretionary income, and asks the question: “Are we maximizing our happiness in the way we spend?”
By discretionary income, we mean the money that is left over for spending, after paying for essentials like taxes, food, shelter, and clothing. It would usually be spent on luxury items, vacations, or other nonessential goods and services. Whether it is a large or a small amount, we all spend it in our everyday life.
Let’s imagine we are given $1,000 at the end of each work week. The only rule with this $1,000 is that we have to spend it on something that adds joy to our lives; something that would make us happier people. What would you spend it on? If your initial thought is: a pair of shoes, a model train, headphones, maple syrup, power tools, decorator pillows, extra water bottle, ball point pens, fedora hat, designer sunglasses, another watch, or leather jacket…odds are, you may not be maximizing your happiness level.
Here’s a suggestion: next time you have some money burning a hole in your pocket, forget product shopping online and do one of these three things:
1. Buy an experience
“Experiential purchases bring more overall happiness to people than material things.” says Dunn. Experiences such as trips, concerts, and special meals often provide more than what meets the eye. The feelings of anticipation leading up to the experience can be exciting. Sharing the experience with others allows us to connect with friends and family. And of course, the memories associated with the experience last long after the experience is over.
2. Buy time
Money can be spent strategically to delegate tasks that we don’t like to do. This frees up time to do the things we like to do. Pretty simple. This explains why greater material affluence often leads to lower levels of happiness: the increase in role results in more time dedicated to things we don’t like to do. Spend money on eliminating things you don’t enjoy and replace them doing things you like doing. Rather than seeing time as a vehicle to get more money, the book suggests viewing happier time as an end in itself.
3. Invest in someone
We all know that making a donation makes us feel good inside, but the impact is even bigger to our happiness than we thought. When we invest in others, we feel happy as long as we believe we made a:
• Personal and controlled choice
• Deep connection with a person/group/project
• Positive impact on the lives of other people
If you can check all three “giving boxes,” investing in others will truly contribute to your feelings of happiness.
Changing the way we spend our money is far from the only way to increase happiness. More money is not always better. Less money is not always better. Strategic spending is always better. These actions could make our life more purposeful and fulfilling, even if only by a little bit. That is a game plan we can all agree with.