Buying Happiness

Spending Money to Create a Life You Love

Money doesn’t buy happiness, or so the old cliche goes.

As Ariana Grande counters in the song “7 Rings”:

Whoever said money can’t solve your problems

Must not have had enough money to solve ‘em.

There are many amusing quotes along the same lines:

• They say money doesn’t buy happiness, but I’d like to verify that for myself.

• Money doesn’t buy happiness, but neither does poverty.

• Money doesn’t buy happiness, but it can make you awfully comfortable while you’re miserable.

• Money doesn’t buy happiness, but happiness isn’t everything.

Happiness is a nebulous concept, as any happiness researcher will admit. And while no amount of money can satisfy our deepest human longings for love or purpose, it can in fact procure all kinds of ordinary delights.

As Arthur Brooks points out, money also enables us to avoid many anxieties and pains that reliably make poor people unhappy. Money may not buy happiness directly, but it can buy freedom, time and power - and that must surely move happiness within closer reach.

There are only a handful of things we can do with money: spend it, save it, or give it away. Depending on temperament and upbringing, most people are inclined to overdo one and ignore another. All three habits are important though, and each can contribute to well-being when used effectively.

Spending is the most common money activity and also the most maligned.

The Problem with Spending

Spending gets a bad rap, and for good reason: most people are lousy at it. If you’re poor then spending is deemed foolish and irresponsible; if you’re rich it can seem thoughtless and gauche.

Giving and saving are widely considered virtuous, but it’s easy to scoff at spenders. Few people consider spending the mutually beneficial, creative and personifying act it can be.

Having a propensity to spend money does not mean someone is good at it; so much of our money is wasted on empty vanities and items that quickly become literal garbage. We often mindlessly support companies and buy products that make us sick or waste our planet’s resources.

Having a lot of money doesn’t indicate spending skill either (paradoxically, accumulating ever more wealth can indicate that you are in fact bad at spending). Many people rightly focus on saving when they are starting out, but if you spend years identifying as “financially responsible” and spending as little as possible, it can be difficult to shift that mindset.

Frugality and prudence are such prized cultural values that many multi-millionaires insist they are middle class. A third of Americans actually die with more money than they retired with, as Bill Perkins highlights in his book Die With Zero. For those lucky enough to build wealth, it’s often easier to simply hoard it rather than learn to use it.

Spending does not automatically get easier or more intuitive as your net worth grows or as you age. Using money well is a skill that takes time and conscious practice to develop.

Spending Well

“More money, more problems” may or may not be true, but more money sure does present you with more options. Historically speaking, people having excess cash flow after covering basic needs is a relatively recent phenomenon. In recent decades the number of products and services created to soak up that cash has absolutely exploded.

Deciding how on earth to spend your money is a modern problem, and it deserves attention. First, let’s debunk a few myths.

• Live simply; research has shown that incomes over $75K (around $100K in today’s dollars) don’t make people happier.

  • False. A 2023 Princeton study and more recent research indicates that happiness tends to increase with income with no cap. Measurements of happiness may be debatable, but in our increasingly uncertain late-stage capitalist society, it’s hard to imagine that more money wouldn’t increase feelings of security, abundance, and empowerment.

  • Besides, we can all get better at spending whatever money we have to maximize subjective well being.

• Buy back your time. Paying for convenience will make you happier than buying things or even experiences.

  • To a point, maybe. It’s not the outsourced activities that detract from happiness though. It’s trying to juggle them while also sprinting along in a busy corporate rat race.

  • Given enough money and time, many wealthy people savor activities like gardening, child care, and cooking that burned out working parents may be relatively happy (or forced) to outsource.

• Buy experiences, not things.

  • What’s the difference, really? Experiences require things, and having things is also an experience. A car can provide adventures and transportation. A piece of art sparks reflection and may remind you of a person or place. A new outfit can make you feel sexy and confident. We watch a TV; we nestle into silk sheets; we show off a handbag.

  • Beyond utility and positive feelings, material things can help you realize values like status, belonging, beauty, and security. In a very literal way, we all experience ourselves through the material world. Being may be what matters, but we achieve that through having, doing, and interacting with others.

The key to spending well is using your money to exemplify your values. This applies to what you buy as well as where you buy it. Supporting individuals and businesses that you respect creates a positive cycle economically and also spiritually.

Step One - Identify your Values

Who am I? What matters most to me right now? How do I want to become?

There are dozens of different values, and plenty of books and online exercises can help narrow yours down. I use the term loosely to describe not just moral principals like honesty and integrity, but tangible priorities that can guide your life and work as well as daily decisions of how to spend your precious time and money.

I’ll use myself as an example. I’ve kept color coded spreadsheets for many years that outline my values and correlating goals. Here are my top 5:

• Independence (freedom, autonomy)

• Security (safety, health, sanctuary)

• Success (wealth, achievement, status/image)

• Relationships (family, romantic love, friendship)

• Personal Growth (learning, spirituality, adventure)

Step Two - Experiment

Practice spending. Take notes on what resonates. Expect “waste” as a cost of self-discovery. You may surprise yourself!

When I was in my late 20s I got my first big bonus check right around the time I totaled my used Volvo. I somewhat impulsively purchased a brand new Audi A5. I was an up and coming banker who had already acquired a taste for designer shoes and fancy restaurants (ahem, success/image values stoked!). I paid cash and was saving plenty for retirement so it felt appropriate, if not responsible.

Turns out I hated it. I was embarrassed by the attention it brought and how it was delivered by valet before my older clients’ and colleagues’ cars; I became a magnet for cops and creepy guys in parking lots; people assumed I was a trust fund kid or some man was funding my lifestyle. Also, I couldn’t handle the horsepower and somehow managed to flip it on a residential street a few short months later. I took the insurance check and bought another used Volvo - and put the rest down on a rental property.

I learned that I’m not a car person. Good to know! A decade later I learned that I am an international business flight person though. You never know until you try.

The same principal applies to smaller purchases like fresh flowers for your home or organic berries. Investing in personal growth could mean buying a $25 book or a $2500 coaching course. You can value relationships by Ubering to visit a friend or flying across the country to babysit your nieces. These are all purchases I’ve made in the last year, and they have all been gratifying.

Step Three - Refine & Level Up

I agree with Suzy Welch that values are fairly immutable, but their expression will evolve over time. You will change and so will your spending. Independence for me meant living without roommates in my 20s, taking big solo trips in my 30s, and quitting my corporate career in my 40s.

Once you understand what you value and have experimented enough to know how what kind of spending you enjoy, you can consciously spend more to deepen your satisfaction without the risk of wondering whether you will really appreciate a purchase.

I remember agonizing over whether to buy a $450 orange velvet Crate & Barrel chair soon after I bought my first condo. This was 20 years ago, and I was making less than $50K. I thought about it for weeks and sought advice from friends and family, visiting it multiple times in the store. I finally took the plunge, riddled with anxiety.

It was perfect in that space, and I still cherish it in my current living room. Since then I’ve gradually gotten more comfortable and knowledgeable spending on furniture and my home. I can confidently and quickly make larger purchases now, knowing I’ve never regretted one and that I generally keep furniture and homes for decades.

At this stage, you should also dig deeper and learn how things are made. You vote with your dollars every time you spend. Pay more to consciously support the artisans and creators you admire. Avoid companies that don’t treat their employees well or create damaging products.

Buy things that will last and prioritize quality over quantity. Material things take resources to produce, and all of our resources are ultimately limited.

The Value of Spending

Of course it’s possible to live a meaningful, values-based life without spending much money. I’m inspired by nuns who take vows of poverty and many others who eschew wealth to focus on service. I’ll discuss the importance of giving in my next post.

Whether or not you have much money, how you spend your time matters at least as much; one of the best uses of money is to buy you the time freedom to create and express your values. I’ll focus on time in more depth in the future as well.

For most of us though, given how much money flows through our fingers, we would do better - and be happier - to allocate spending it with a lot more intention.

How you use your wealth reflects what you value. If you say you value health but spend most of your grocery budget on booze and processed food, then either you’re lying to yourself or your spending is out of alignment. That dissonance will wreak havoc slowly, then all at once.

If you say you value family but spend most of your time working and most of your income on mortgage interest and car payments, pause and reconsider. Maybe you also value prestige, safety and achievement, and you’re balancing your values with integrity. If not, you can change course.

Just be honest with yourself - and with your partner if you share money with someone. It can help to set specific spending targets just as you might for saving or tithing.

Even small spending tweaks can help you feel more aligned and alive. Spending isn’t good or bad; it is a powerful way to demonstrate to yourself and others what you care about.

Start small, build the skill of spending over time, and create a life you truly love!

Yours in Wealth,

Elizabeth