By: Joey Casolaro, CFP®
Earlier this year, I explained two principles you can follow to obtain the most happiness from your spending https://www.highlandplanning.com/learning-center-1/how-money-can-buy-happiness-part-1. In today’s article, I will cover three more concepts that can help bring more joy in your life with your spending. Below are the five principles outlined in the book Happy Money.
Buy Experiences
Make It a Treat
Buy Time
Pay Now, Consume Later
Invest in Others
Buy Time
An American entrepreneur, Jim Rohn, once said, “Time is our most valuable asset, yet we tend to waste it, kill it and spend it rather than invest it.” This quote pops into my head whenever I shop at Costco and see the absurd line at the gas station. It amazes me how so many people are willing to wait in line for over 30 minutes to get gas just to save a few bucks. Time cannot be created or given back, making it vital to use it on the things you love doing, even if it means spending more. For example, some people do not like food shopping or meal prepping and instead use that time to do something more enjoyable. In that case, it makes sense to outsource those tasks if you can afford it. Delegation will allow you to buy more time to do what you enjoy and delegate what you don’t.
Pay Now, Consume Later
Many people believe consuming things now and paying for them later provides happiness. Impatient consumption is one of the reasons credit cards are so popular. They allow you to enjoy something instantly without having to pay for it. Some people, however, can begin to worry and have anxiety over their credit card debt after the purchase, making it counterproductive for increasing happiness.
On the other hand, paying now and consuming later has increased happiness for the anticipation it brings. In French, the verb Se rejouir captures the experience of deriving pleasure in the present from anticipating the future. The best example of when this takes place is with planning a vacation. When you plan a vacation, you give yourself something to look forward to (the se rejouir period) that comes free of charge after you book the holiday. This anticipation brings happiness and excitement that usually increases as you get closer to the trip. In Happy Money, they explain studies have shown that anticipating good things produces a distinct pattern of neural activation in the nucleus accumbens, a region of the brain linked to the experience of pleasure and reward.
Invest in Others
Investing your time and giving to others has been shown to not only affect happiness but also your health and feelings of wealth. When you invest in others, you are making a positive difference in people’s lives which can enhance your sense of purpose and fulfillment. These acts of kindness release the feel-good neurotransmitters in your brain, like serotonin and dopamine, lowering stress levels and improving overall well-being. Additionally, investing in others and volunteering allows you to experience a sense of connection and community, creating a feeling of wealth beyond monetary value.
Most people only focus on how to make more money, but knowing how to spend your money to receive maximum happiness is equally important. By following the five principles above, you can ensure you are on the right track to get the most pleasure from your spending.
Sources:
https://www.meaningfulhq.com/happy-money.html
https://www.businesshorsepower.com/time-valuable-asset/
Joey Casolaro is a CERTIFIED FINANCIAL PLANNER™ at HIGHLAND Financial Advisors, a Fee-Only fiduciary wealth advisory firm that offers comprehensive financial planning, retirement planning, and investment management. Joey graduated from the University of South Florida with a bachelor’s degree in personal finance and successfully passed the CFP national exam in 2021. Joey enjoys working out, spending time outdoors, and hanging out with family and friends in his free time.