It’s true that money can’t buy you love (or class, for that matter). But a bevy of research has found that it can buy you happiness when you spend it the right way. And no, that doesn’t include springing for the latest tech gadget, a new pair of pants or yet another candle from Bath and Body Works.
For a long-lasting mental boost, sample these five science-backed spending strategies.
Research shows that putting your cash toward an activity or experience brings far more emotional reward than purchasing a tangible item.
“Things can buy happiness—they just don’t buy lasting happiness because people quickly adapt to a change in their circumstances and tend to return to a happiness ‘set point,’” explains Laura Rowley, author of “Money and Happiness: A Guide to Living the Good Life.” “By contrast, an experience delivers continuing rewards because it creates memories you can enjoy again and again.”
Harvard professor Michael Norton, co-author of “Happy Money: The Science of Smarter Spending,” adds that buying an experience doesn’t necessarily mean splurging on a two-week Tahitian vacation or another big-ticket item. “It could just mean having lunch with a friend,” he says, noting that the joy you’ll gain from this social interaction will have more impact than something that collects dust in your home.
Treating someone is another key way that spending can bring happiness, according to research. This form of altruism, however, isn’t purely selfless—it makes us feel better about ourselves and provides a number of social benefits.
“By highlighting certain values, such as compassion and love, your happiness increases based on meaning and purpose, rather than hedonic happiness,” explains clinical psychologist Elizabeth Lombardo, Ph.D., author of “Better Than Perfect: 7 Steps to Crush your Inner Critic and Create a Life You Love.” “In addition, spending money on others helps create and solidify social connections. And strong social relationships bring us greater happiness.”
According to Norton’s research, you don’t have to give a lot to get a mental boost. “We did research in Uganda and found that even when people are quite poor and struggle to meet their basic needs, when they spent on other people, it made them happier,” he says. “The amount can be quite small, even just $5, as long as you spend it on someone else.”
A recent study published in Psychological Science showed that people who spend in a way that jives with their personalities are typically the happiest—for example, hitting up the farmer’s market if you’re into sustainable food and cooking from scratch or buying movie tickets if seeing the latest flick appeals to your artistic, and entertainment, sensibilities.
It makes sense, Lombardo says, because what makes you happy is quite individual to you. “When you spend money according to your personality, your strengths and your interests, you are bringing out authentic parts of you, which increases happiness,” she explains.
Rowley adds that personality shapes your underlying values, which is another reason that aligning spending to your true self is a key. “If I’m an intellectual and an introvert, I’m going to value spending time alone reading books,” she says. “If I’m outgoing and an extrovert, I’m going to value spending time with friends.” Using your hard-earned cash toward these endeavors gives you the most proverbial bang for your buck.
Norton says that, according to his research, how you spend your time is a huge predictor of happiness. Therefore, the idea of using your money to buy more time, or more quality time, is a worthy expenditure.
Rowley agrees, offering this science-backed tip: “Live close to your work, even if you have to spend more, live in a smaller home or earn a little less. Commuting is a misery that people never adapt to, in part because of the uncertainty it involves, according to psychologist and Nobel Laureate Daniel Kahneman,” she says. “Living close to your job also means you have time to spend with family and friends, exercise, volunteer and have hobbies—all of which are proven to enhance quality of life.”
Other ways you might spend to increase your quality time include springing for a Blue Apron subscription so you don’t have to wait in line at the grocery store but still enjoy home-cooked meals, or hiring a house cleaner or gardener, so your weekends aren’t spent scrubbing or pulling weeds.
Okay, so this spending tactic may sound a lot like saving. However, when you mentally reframe the idea of tucking away money as an expenditure, you’ll be happier. Here’s why: While saving for the sake of saving is not a predictor of happiness, Norton says having something special in mind that you’ll spend that money on later is.
And the payoff is bigger, too, says clinical psychologist Ben Michaelis, Ph.D. “When you save for a long-awaited trip or experience, this tends to make you happier because it is something that you would not ordinarily be able to afford,” he says. “The effort that you put into saving up usually means that you will savor the experience when you’re on the trip.”
In other words, delaying gratification, whether it’s putting money away for some much-needed R&R or something more practical, like your post-work life or kids’ college fund, allows your excitement to build. Then, when it’s time to spend, you’ll thank yourself for putting in so much effort all those months, or years, leading up to that moment.