Money can't buy happiness, the saying goes. That's true on the surface, sure, and science confirms that the extraordinarily wealthy aren't significantly happier than their middle-class counterparts. Having insufficient funding to provide for basic necessities decreases happiness, of course, but past a certain income level which allows for all "needs" and a few "wants," the difference that money makes seems to be pretty small.
In and of itself, no, money doesn't equal joy.
That's the good news, if you don't happen to be fantastically wealthy. The better news, though, is that there are specific ways in which money can be spent that result in measurable happiness boosts. That is, just having piles of money isn't going to make you happier, but even on a more modest income, knowing how and when to spend your money can, in fact, buy you some happiness. Surprised? Here's five ways that research says happiness can be bought:
1. Spend on someone else
No matter what the money goes toward, the verdict is in---you'll be happier if you spend it on someone else rather than yourself. When you make someone else happy, that makes you happy, too. The technical term for doing this is "prosocial spending," and no matter what the money is used for (goods, services, charity), if you use your money to benefit someone else, that makes you happier than spending it on yourself. Not only is this a compelling argument for generosity in various forms for your own mental wellbeing, it's good for your entire community!
2. Spend on having more time
Part of the "money can't buy happiness" party line is the reality that it's what we do rather than what we have that seems to matter most to folks in the end. In terms of spending, that means it's a no-brainer to invest in ways to give yourself more time to do the things you enjoy, rather than the drudgery you don't. If you hate cleaning and can afford it, hire a housecleaning service. If you can afford to fly rather than drive (and can then spend your travel time reading a great book or otherwise enjoying yourself), do that. Again, most of us are not in a position to throw money at every little inconvenience, so choose wisely; at the same time, don't feel guilty about paying for a service that truly frees you up to enjoy your day-to-day life more fully.
3. Buy little instead of big
So there's a couple of different things at play in this one; first, studies have shown that we often get a greater happiness boost out of anticipation rather than the actual event itself, which means more, smaller events give us more frequent anticipation. Second, it turns out that we're so convinced that "big" things will make us happier, the opposite is actually true---there's a mood boost followed by a letdown. Smaller things make us happier, over time, than larger, more extraordinary ones. Simply put, allowing yourself a weekly splurge on a fancy coffee will bring more joy to your life than a new car. Really!
4. Acquire experiences rather than possessions
Lots of recent research has focused on how spending on intangibles such as experiences rather than material goods brings a greater boost in happiness. Some of this can be explained via the joy-of-anticipation phenomenon explained above, but some of it is also because we tend not to compare experiences the same way we do possessions. Maybe the Jones' have a really fancy car and you find yourself feeling jealous, but you don't really know what they did on their vacation, and not only was your vacation a lot of fun, we tend to forget the unpleasantries and idealize our past experiences, too. We grow tired of that couch we look at every day, but remember that trip to the museum? Wasn't that great? (The brain is a weird thing.)
5. Spend later
I've already mentioned anticipation twice, and third time's the charm---if you delay spending, it boosts your happiness in two ways: You lengthen your anticipation, which of course gives us a bigger happiness boost, and you also tend to make a better decision and how you spend. So not only are you happier while waiting, you're happier later as well, because the choice/purchase you eventually make tends to be a smarter one.