We’re often told that money can’t buy happiness. The best things in life are free, after all, and money only works if you take it seriously. There are important retirement accounts to fill, and austere bank managers with somber mustaches awaiting your next savings deposit. There’s no giddiness in wealth building!
But here’s the truth about money and happiness: the surest way to create a sustainable financial plan is to spend money on the things that make you feel joy, while letting go of the unnecessary purchases that add nothing to your well-being.
The problem is that you may not know how to spend money on things that make you happy. What makes an expenditure joyful anyway? How do you know that a purchase will add to your life?
Unfortunately, many of us struggle to figure out how to buy ourselves a little happiness. That means we either hoard our money or get into a cycle of overspending in the hopes of finding happiness with the next Amazon delivery. And we fall for the idea that money can’t buy us happiness, since it seems to do nothing but add stress.
If you scoff at the idea of money buying happiness, here’s what you need to know:
We Don’t Know What Makes Us Happy
There’s a reason you suck at deciding which purchases will make you happy. Human beings are notoriously terrible at predicting what we will enjoy.
Our inability to anticipate what will make us happy seems like a pretty counter-productive quirk of our brains. In fact, this quirk is evidence of multiple cognitive biases—systematic errors in logical thinking that can lead to poor decisions. Biases like:
Hedonic adaptation describes how we get used to the things we have. Think of the absolute pleasure and pride you felt upon first purchasing your car. I’m guessing your delight in your new vehicle faded before the new car smell had completely dissipated. This happens because our brains are wired to get used to things fairly quickly.
This cognitive bias means that no purchase or consumer good will permanently satisfy us. Unless we truly examine the reasons why we are making purchases, we are likely to keep reaching for another thing to buy that will offer momentary pleasure. But each new thing will quickly become old hat, prompting another purchase.
Hedonic adaptation is why it is so easy for a major pay raise or other financial increase to land you in the exact same financial stress you felt at a lower level. The purchases that were rare treats when you were poorer have become a standard part of your life, and you enjoy them less. But you are also loath to part with them now to improve your financial life, because they are part of your new normal. This is why behavioral economists have even started to referring to hedonic adaptation as the hedonic treadmill—you have to keep running faster and faster just to stay in the same place enjoyment-wise.
Overvaluing Opportunity Costs
An opportunity cost is the value of whatever you give up when you make any decision. For instance, when my then five-year-old son decided to spend some of his allowance money on a new Batman toy, he got teary-eyed at the loss of the money from his piggy bank. He was feeling the effects of opportunity cost in real time: he might have gained an awesome new action figure, but he lost the money (and the possibilities it represented) by doing so.
Feeling paralyzed by choices is one way we commonly overvalue opportunity costs. My son spent ten minutes after he made his purchase waffling between deciding to return the toy or keep it. Though there were only two choices available to him, he kept second-guessing his decision until he recognized that the toy meant more to him than having the money back.
This sort of second-guessing behavior is familiar to anyone who tends to overthink purchases. But such second-guessing and choice paralysis has become even worse in the modern world when the number of choices available to us has exploded in almost every context. Too many choices make it harder to choose something—and when we do choose, we tend to enjoy it less because we are thinking of all the things we didn’t choose.
This may sound counterintuitive, since we tend to see having more options as a good thing. But anyone who has scrolled through the wide array of Netflix streaming options for 30 minutes, only to skip watching a movie altogether, can attest to the paralyzing nature of too many possibilities. According to Barry Schwartz, the author of the book The Paradox of Choice, the abundance of choices we face in modern society often leads to unrealistic expectations, second-guessing, paralysis, anxiety, and stress.
In other words, having too many choices and overvaluing the opportunity costs they represent makes it very difficult for you to accurately predict what purchases will make you happy.
You Can Find Your Happiness with Mindfulness
So how can you focus your spending on things that bring you joy if the hedonic treadmill and opportunity cost fears are affecting your choices?
This seems like the kind of catch-22 that keeps you constantly buying new things in search of the one that will make you happy—or that alternatively keeps you from ever buying anything as you second-guess what will make you happy.
While you may never become a perfect predictor of your future happiness, you can get much better at it. With a little self-knowledge, you can focus your budget on the things that you can generally expect to make you happy. There are a number of techniques from mindfulness practice that can help you to better know yourself so that you can pinpoint the purchases that make you happiest.
Start with Curiosity and Compassion
Our culture tends to treat both ignorance and errors as things to regret, rather than opportunities to learn. This means that not knowing what makes you happy and making a mistake in trying to find your happiness can make you feel ashamed. That’s why it’s important to regard your investigation into what makes you happy with curiosity and compassion, rather than guilt or anger at yourself.
Imagine that you are observing a friend, rather than yourself, as you make a mistake. You would never shame or blame a friend for feeling confused or taking a wrong turn. You would instead be curious about why your friend is struggling and offer him a compassionate response to his complex emotions. You deserve the same response from yourself.
To practice curiosity and compassion with yourself, make a point of stopping what you are doing anytime you find yourself engaging in negative self-talk. Then write down the following words:
“It makes sense that I struggled with that. What exactly was difficult about it for me?”
Letting yourself know that it is okay that you struggled will allow you to bypass your inner critic. Answering the question about why you struggled will allow you to start actually uncovering what is behind your mistake, difficulty, or lack of knowledge—without shame.
Practice the Skill of Attention
The modern world has more distractions than humans have ever before had to deal with—which makes it even more important for us to practice the skill of attention. It is very easy for us to go through our days without truly knowing how we feel. Instead of centering our attention in our bodies, we allow our lack of attention to spur our consumption.
For instance, we have all had the experience of eating an entire bag of chips without even noticing what we are doing. Generally, this happens while we’re watching TV or scrolling through Twitter on our phones, allowing our attention to stray away from the important work of savoring the subtle bouquet of Lay’s Dill Pickle-flavored potato chips. Only when abdominal discomfort strikes do we turn our attention back to our bodies, which means we feel the unpleasant after-effects of the binge without having truly enjoyed the taste.
The way to combat this kind of mindlessness is to practice attention. This kind of practice can take different forms, which means you can choose what method works best for you:
Focus on Your Breaths
In mindfulness meditation, the act of paying attention is typically rooted in your body. When you meditate, you focus on your breath going in and out, or on how your body feels in the moment.
Checking how your body feels can help you to pay better attention to your emotional state as you handle your daily choices. These emotions are often reflected in your body, even if you are otherwise unaware of them. For instance, a feeling of panic can settle as a cold knot in your belly; stress can cause tension in your shoulders or other joints; and elation can make you flush with pleasure.
Focusing on your breath has another benefit, in that you always have your breath with you. Whether you are in the middle of a major presentation to the CEO of your company, driving to visit your in-laws, or standing in line at the bank, you can take a moment to focus on your breath. Simply focusing on even a single breath can help you bring your mind back to a state of relaxed readiness and can help you identify emotions that you may otherwise overlook.
Focusing on your breaths can help you understand your “neutral” state, which can help you better identify the sensations of joy, tension, or other emotions when they occur.
Flannery O’Connor once wrote, “I write because I don’t know what I think until I read what I say.” Though it sounds like a flippant remark, it’s actually a very concise description of the mindful process of journaling.
When you take the time to write down your thoughts and feelings, you allow yourself to sit with those thoughts and feelings, rather than ignore them, distract yourself from them, or bury them under some sort of consumption. You will have a much better sense about how you feel about what is happening in your life if you take the time to put those feelings into words.
To start a mindfulness journal, you do not need to jump directly into laying bare your feelings on the page. Begin by simply writing what you observe around you for twenty minutes. Taking the time to think about how your dog’s breaths sound as she is snoring at your feet, how your toes feel a little chilly on the hardwood floor under your desk, and how bitter and hot your coffee tastes will give you excellent practice in paying attention.
Once you get in the habit of writing about what you notice around you, then you can turn your attention (and your descriptions) inward, and become as mindful about what is happening within you as you are about your surroundings.
This practice will help you to better know when, how, and why you feel various emotions, which can help you pinpoint what will make you happy.
A mood tracker is a space to record how you felt each day (or at various times during each day, if you want your tracker to be more granular). This can be as simple as making a note of your mood in your calendar. Then, you can look back over your calendar to see how your mood changed from day-to-day.
For instance, tracking your mood can help you connect your emotions with events or patterns in your life. If you find that you are irritable and depressed every time you have an interaction with your sister-in-law, you can start to unpack what’s happening between the two of you—and stop mindlessly going on a retail therapy shopping binge after every conversation you have with her.
Bullet journal enthusiasts have made paper-and-ink mood tracking much more mainstream. Emulating the kinds of beautiful tracking spreads that you come across on Pinterest and Instagram can be a great motivation to track your moods if you’re excited by the idea of breaking out the colored pencils and drawing paper. But your tracker does not need to be that elaborate, nor does it have to be on paper. Simply making a note of your mood somewhere you can review it (like in your phone) will give you the benefits of mood tracking.
Organization expert Marie Kondo refers to the sensation of “sparking joy” when she advises her clients on how to declutter. When you hold an item in your hand and you feel an inner sensation of harmony (which she adorably illustrates in her show by making a chiming sound and kicking up her foot), you know that the item brings you joy and should remain in your home.
Identifying the items in your home that spark joy can be somewhat easier than anticipating which purchases will bring you happiness. You can hold a sweater or a snow globe in your hand, which you can’t exactly do with a margarita night out with your besties or even a new iPhone. (I mean, they’ll let you hold it in the store, but it’s tough to distinguish the excitement of a new purchase from the joy you feel when you have an item that truly brings you happiness).
That’s why taking the time to understand yourself can help you to better spend your money. Knowing yourself puts you in a better position to recognize the harmonious chime of inner joy, whether it comes from the decision to go out with your girls or buy a new gadget. Knowing the real deal also means you won’t confuse that chime of joy with the off-key tinkle of buyer’s enthusiasm.
Spending time on your breaths, your observations, and your moods can all help you to better spend money on joy. And that’s a wonderful way to use your time and your money to buy more happiness.
When was the last time money bought you happiness?