Three Ways You Can Spend Your Money
July 5, 2021
How can we spend our money in ways that improve our well-being?
During my weekend reading, I came across this interesting study titled Pro-social Spending and Buying Time: Money as a Tool for Increasing Subjective Well-Being. Researchers from Harvard and other renowned universities published this paper.
The study shares some interesting perspectives. According to the research, once our fundamental needs are met, purchasing more personal possessions does not contribute to increased happiness in the long run.
That said, there are three ways we can spend our money to improve our personal well-being. I found all three options pretty logical and intuitively valid, though one of them was a bit surprising.
Watching a movie, going on a holiday, a trekking trip with friends, or dinner out with family- spending money on experiences that we share with others contributes to more lasting happiness compared to buying material possessions. Spending money on experiences rather than material goods results in more positive feelings.
I can’t disagree with this.
Spending money on others is another way to increase our satisfaction and fulfillment. The research paper calls this pro-social spending. Whether supporting a voluntary cause or a charity, tithing, treating a friend to dinner, or buying a gift for someone- these kinds of spending bring more lasting happiness than buying stuff for ourselves. Giving and sharing are fundamental human DNA. Spending money on others enhances our social connection, allows us to make a meaningful impact and feel good.
This third option was unexpected and surprising. But as I reflected on the message, it made sense. When we spend money on anything that saves us time, it has a compelling and positive impact. Buying a house near the workplace to save on commute time to work or paying for concierge services to take care of your personal activities, or paying a cook to prepare tasty food for you when you get back from a hard day at work- these are all examples of spending money to save time. If purchasing positive experiences is one way that makes us feel happy, buying anything that reduces our negative experiences is also another way to make ourselves happy. The research indicates that people who invest money in buying themselves valuable time report better life satisfaction.
There is an obvious relationship between our income and our life satisfaction. I found myself agreeing strongly with the key conclusion of this research paper that spending our money in the right way can also play a vital role in enhancing our overall sense of well-being.