You’ve worked hard for your wealth—so shouldn’t you be able to use it to have a happier, more fulfilling life? We sure think so.
Unfortunately, we see too many individuals and families focus the bulk of their time and energy on accumulating wealth while paying little attention to the best ways to harness the benefits of those assets. When they retire or reach an advanced age, they often don’t have a handle on how to spend their wealth in rewarding, meaningful ways—just when they have the freedom to do exactly that.
Over the past decade or so, there have been fascinating discoveries about the relationship between money, spending and happiness. You can use that information in your own life to earn, grow and spend money in ways that can potentially lead to greater happiness and satisfaction.
Here’s a look at steps you can consider taking to boost the likelihood that your wealth will bring you greater joy.
1. Be a doer.
Our spending choices often involve whether to buy material goods or purchase experiences that cause us to be out and about in the world. And we tend to lean toward the possessions for a variety of reasons—they are tangible (you can see exactly what you’re getting), they are easy to compare with similar products, and they are items that we expect to have and use for many years (unlike, say, a dinner that will last a couple of hours or a three-day vacation).
But guess what? It’s the experiences that prompt you to do something active that are more likely to boost your long-term happiness. Consider one study that placed more than 2,500 adults into either a material group or an experiential one and then monitored their emotions. Material buyers purchased jewelry, clothing, furniture and similar items. Experiential buyers spent on sporting events, restaurant meals and the like.
The result: Reported happiness was higher for the people who consumed experiential purchases versus material ones in every category of spending—regardless of the cost of the items.
2. Spend on “flow” experiences that help you pursue a challenge.
If you want to go to the next level in being an experiential spender, try focusing on experiences that empower you to pursue a goal that’s important to you or to overcome a challenge you want to conquer.
These types of challenge-based activities are sometimes categorized as “flow” experiences (a concept originated by positive psychology co-founder Mihaly Csikszentmihalyi). They capture your heart and attention and provide you with the kind of timeless moments you will remember forever. This can happen during artistic or creative pursuits, athletic endeavors, active time spent in nature, or any type of activity where you are innately engaged and your skill level is reasonably matched with the challenges being presented to you.
3. Disrupt your material goods spending patterns.
While it may be easy to come up with a long list of cool experiences to spend your money on, it may be harder for you to rein in your spending on material goods. The allure of one-click buying can act like a magnet on your index finger. But if you know that the rush you get from acquiring more “stuff” dies out fast, then it makes sense to disrupt your buying habits a bit. One option: Commit to waiting a week, or even a month, before you purchase a nonessential item you see online or in a store. During that time, notice how often you find yourself longing for that item. If you’ve barely thought about the product over that period, cross it off your list and get on with your life. If you find yourself craving it repeatedly, it’s a good sign that you’ll derive real pleasure from owning it.
4. Buy time—then use it well.
Although we can do many things faster and more efficiently than ever these days, many people still say they’re time crunched and anxious about finding enough hours in a day to get through their to-do lists. Those conditions have been shown to be directly related to poorer mental health.
One solution is to use some of your money to buy time. The rise of the gig economy means you can find providers who can take a broad range of chores and responsibilities off your plate, both personally and professionally.
The catch? Once your spending has helped you carve out more time, don’t waste it. Rather than getting caught up on social media or squeezing in more work, do something that makes you happy and boosts your mood. Seek out friends and have some fun, exercise or volunteer—being active and social during at least some of your downtime is a key part of being happier.
5. Support others.
Really want your dollars to make you happy? Try spending them on someone other than yourself. Give experiential gifts to friends and family on their birthdays or anniversaries. Help a grandchild buy his or her first home. Support charitable organizations that you value. “Pay it forward” in line at the grocery store. Numerous studies show that such pro-social spending is linked with higher levels of well-being and satisfaction.
Important: Notice a common thread running through these spending tips? They generally involve other people—having experiences with others, spending on others and freeing up time to be with others. The upshot: A plan to connect your spending with greater happiness should include strong relationships with friends, family, or a spouse or partner (and ideally all of the above) with whom you can create amazing shared memories.
While money and happiness may always be a tricky topic to untangle, you can take action steps with your wealth right now that could better help you find joy and live your best life.
VFO Inner Circle Special Report
By John J. Bowen Jr.
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