This past week at a conference in St. Louis, I had the opportunity to hear Dr. Elizabeth Dunn, who is a psychology professor at the University of British Columbia, give a presentation on her book, Happy Money: The Science of Happier Spending. Through her work, she challenges the blanket notion that money cannot buy happiness.
Specifically, her research reveals that money could buy happiness if only we were better at spending it. One aspect of note is our tendency to keep spending money on things that used to make us happy but no longer do. Dunn explained that things and experiences normalize, so after a while, the happiness they once brought diminishes while our spending does not.
For example, is there a magazine you loved but now rarely read and continue to buy each month? Did you join a golf course when you played every weekend but, now that you have kids, find it difficult to schedule a round? These expenses no longer make sense because your situation has changed. Money is going out the door without giving you happiness in return.
So instead of paying for the magazine you no longer read, maybe you should spend that money on an Audible subscription, which would allow you to listen to that stack of books by your bed that you have also been meaning to read. Instead of paying for a membership to a golf course you never use, maybe you join a club with a pool, allowing you to enjoy some active quality time with your kids.
Bottom line—if you’re going to spend money, make sure you are actually getting enjoyment out of it and not funding a hobby from five years ago.
Josh Norris is an Investment Advisory Representative of LeFleur Financial. Josh can be reached at josh@LeFleurFinancial.com.