How to “wring the most happiness out of every $5”—by structuring experiences to create the largest impact on happiness and satisfaction.
Dunn (Psychology/Univ. of British Columbia) and Norton (Marketing/Harvard Business School) write that bringing in more money doesn't necessarily increase happiness. This is certainly not a new assertion, but their infectious enthusiasm for their subject is admirable. They organize their thinking around five principles for money—1) Buy Experiences; 2) Make It a Treat; 3) Buy Time; 4) Pay Now, Consume Later; 5) Invest in Others—and they offer a way to break out of the consumer cycle of ever-bigger, expensive purchases of goods like cars and houses. They argue that the happiness associated with such a pathway is evanescent at best. A bigger bang for the buck can be achieved by organizing small purchases using their principles. The more of them that can be combined into one purchase, the greater the happiness. Buying coupons for friends to enjoy coffee at Starbucks sometime later in the week is better than doing the same for oneself, or buying the coffee today. They organize the evidence to back this up, discussing how “what we call the ‘drool factor’ ”—anticipation—works on us at a physiological level, and how “delay can enhance the pleasure of consumption.” Dunn and Norton argue against going into debt to pay for either experiences or things, insisting that debt is detrimental to marriages and other relationships, nor do they favor buying now and paying later. They provide an interesting exploration of increasing happiness by buying time, as well as ways to address budgeting.
Helpful ways to think about improving quality of life as it relates to finances.