The Science of Smart Spending
We’ve all suffered at one point or another from buyer’s remorse: the expensive handbag, the antique chair, the velvet suit and the countless kitchen paraphernalia that promise to cut our cooking and preparation time in half but that we in fact never get to use. We buy things that we think will bring us happiness.
In “Happy Money: The Science of Smarter Spending” Elizabeth Dunn, an associate professor of psychology at the University of British Columbia and Michael Norton, an associate professor of business administration at Harvard Business School, explain how money can buy happiness—if you follow these basic principles of smarter spending:
- Choose Experiences (their research proves that material purchases are less satisfying than shared experiences) – Choose a vacation away with friends over a new television for example.
- Pay Now, Consume Later (delayed consumption leads to increased enjoyment) – Pay for that vacation up front so that you have something to look forward and no credit card bill to stress over.
- Invest In Others (giving to others when you feel your gift will make a real difference)
- Don’t overindulge. Underindulging by temporarily giving up something we love like our daily latte or chocolate bar even when we have the cash to buy some, can renew our enjoyment of the things we love.