Three Novel Ways to Use Money to Elevate Your Wellbeing — According to Science
The third method surprised me too.
I would never assume that everyone reading this has all of their basic financial needs met. It would be a blunder of catastrophic proportions to think otherwise.
However, I do reckon there are two generalizations I can make regarding the vast majority of people reading this: that most people have their financial needs met but aren't aware of it. The reality in our society is that our baseline need is constantly being revised upward. What do we mean by that? The basic need items of the current day would have been considered luxuries just a mere decade ago.
Think about GPS tracking when driving from point A to point B. Think about having more computing power in your pocket than the computing power in the Apollo 11 Moon Landing.
The second assumption I would like to make is that people who have opted for a more financially minimalist lifestyle have greater flexibility when considering both their purchasing and non-purchasing decisions. In other words, when one isn't allured or victim to Keeping Up With The Jones's, one can create more freedom to make calculated and positive decisions to steer their lives.
Okay, now that we've gotten all the semantic-structuring, argument-building, and preface-posturing hodge-podge (and my allotment for hyphens) out of the way, let's take a look at three ways to spend your money to help increase your wellbeing and overall happiness.
This isn't going to be rooted in opinionated hyperbole either, all of this is being backed by the latest research conducted in a joint effort by Harvard, the University of British Columbia, and Simon Fraser University researchers.
Let's take a look…
Happiness Is About Getting From Point A To Point B
And really everything in between. I don't mean that in an esoteric "it's not about the destination but the journey" type of mumbo-jumbo you might see on a bumper sticker.
While all of that holds its weight when considering happiness and fulfillment in life, I mean it in the most literal sense possible. Using your money to purchase an experience tends to provide more lasting pleasure and become more tightly linked to people’s identities than material goods.
How is this so? Consider this…
You just got back from Best Buy (or maybe if you're of the younger generation, you just closed out of an Amazon purchase confirmation browser window). It's finally done. You just got your hands on a fancy new 65" Class QN900A Series Neo QLED 8K UHD Smart Tizen TV from Samsung.
You're on cloud nine…
Think of the potential: the NFL games you're going to watch, the way you'll be able to see every wrinkle in Steven Seagal's face when he's saving the USA from unabated Russian annihilation.
You're so excited in fact, you run over to your neighbor Jim's place. You don't even call, you knock on the door. Suzie, his wife opens the door. She's dressed in perfect housekeeper garb. It's almost as if pigeons flew past her shoulders as she opened the door.
"Hey, is Jim around? I have something amazing to show him!" you tell Suzie. "Of course, Jon, he's actually just in the living room — go right ahead" she responds. You head past the foyer and into the living room, as you turn the corner, you see the back of Jim's head. He's sitting on the couch. As you enter, Jim begins to turn around,
"Look, Jon! I finally caved and got it! The new 85" Class QN900A Series Neo QLED 8K UHD Smart Tizen TV from Samsung! She's a beaut' ain't she?!"
A few moments after you've reached the pinnacle of material consumption — you're usurped by a bigger, better purchase by your neighborly counterpart. This is the folly of trying to tie happiness to material possessions — comparison and the feeling of inadequacy connected to it rears its dragon-like head.
According to the study, even if you and Jim were both (separately) to take a trip to Paris, how could you conclude whose trip was superior? It's too rooted in the subjectivity of your experience and the identity you create with the memory and experience.
It's Better To Give Than To Get
There are plenty of ancient maxims to lay credence to the above claim. The great, Buddha is famous (among many other things) for the line,
"No one has ever become poor by giving"
It's a pretty universal idea among the popular global faiths.
Science, more specifically, random controlled studies, can also stand behind such a claim. In 2008, researchers at the University of British Columbia walked up to random people on campus and asked them to complete a brief survey. They then handed the participants an envelope containing either a $5 or $20 bill. The participants (unbeknownst to them) were broken into two groups: the first a personal spending group and the second a prosocial spending group. The first group was asked to spend the $5 or $20 on anything personal to themselves: a gift, a utility bill, food, etc. The second group needed to spend the money on someone else.
Later, a graduate assistant (unaware of the study controls) was charged with contacting the participants and have them fill out another questionnaire measuring how they felt during the day and their overall happiness. The results surveys found that the participants that were charged with prosocial spending (that is, needing to spend their money on someone else) scored higher marks in overall happiness and satisfaction scores, according to the survey.
It's noted that this phenomenon isn't exclusive to just North America (and perhaps the Western World). A similar study was conducted in South Africa that pooled individuals of different cultural backgrounds and drastically different socioeconomic conditions.
Based on the findings, the researchers concluded prosocial spending strengthens interpersonal inclusion & connection, promotes autonomy and wellbeing, fosters an opportunity to make a meaningful impact, and creates a more memorable and lasting impression compared to purchasing personal material possessions.
Your Money Is A Time Machine
The third way in which money can lead to more happiness and fulfillment is the most surprising for people when they hear it:
Using money to buy time.
This can include a number of things ranging in scope of the amount spent: whether paying for someone to do your household chores (lower amount spent) or paying for a house that reduces the time of your daily commute (higher investment), using money to create time can lead to more personal happiness and fulfillment.
A 2008 study surveying over 2.5 million Americans over a nine-year span noted that the vast majority (80% reporting) of participants believed they didn't have the time to do what they wanted or needed to do. To further up the ante — the feeling of time stress had a further subjective detriment on overall wellbeing compared to unemployment.
We saw in the first subsection that you can increase happiness and wellbeing by purchasing positive experiences. On the flip side, "buying time" is really allowing us to purchase the removal of "negative experiences."
Now the trick here is actually finding the discipline of stopping to spend the money to buy time rather than continuing on the hamster wheel of making money. If you're having trouble visualizing what I'm talking about, take for instance the idea of karoshi or the Japanese word for being "worked to death."
If you're at a place where you have discretionary income, use it to purchase the removal of negative or unfavorable experiences from your life.
Everyone's financial situation is different. There are millions of people probably balking at the audacious argument I just laid out. This isn't aimed at them, however. This is for the individuals who think they don't have what need. Who keep pursuing the next purchase that will make them happy.
Not all purchases are held equal. Steve Martin once said in jest,
“I love money. I love everything about it. I bought some pretty good stuff. Got me a $300 pair of socks. Got a fur sink. An electric dog polisher. A gasoline-powered turtleneck sweater. And, of course, I bought some dumb stuff, too.”
To recap: three purchases to feel happier and more fulfilled (according to science):
- Use the money to purchase an experience. Jim will always have a bigger, better, and more capable widget, however, he'll never have a better memory.
- Use the money on someone else. It's something that connects all human beings across a multitude of metrics. Buddha said it hundreds of years ago: "it's better to give than to get."
- Your money is a time machine. Similar to how you can use the money to purchase positive experiences; you can use money also to free up time and eliminate negative experiences. Take a step back and actually enjoy the moment in front of you.