How you spend your money has a bigger influence on your happiness than how much money you have. Follow the five principles of “smart spending”:
“Buy experiences” because that can make you happier than buying material goods.
Experiences boost joy by connecting you to others and reinforcing your sense of identity.
“Make it a treat.” Having chocolate every day isn’t as special as having chocolate sometimes. Rationing your use of things you enjoy will increase your pleasure in them.
“Buy time.” Before you buy something, consider its impact on your sense of having enough time. Turn “decisions about money into decisions about time.”
Volunteering time for meaningful causes will make you feel as if you have more time.
“Pay now, consume later.” Paying in advance will increase your satisfaction.
“Invest in others.” Spending for others, instead of yourself, will make you happier.
Businesses should consider these spending principles when trying to satisfy customers or employees.
Government policy should promote happier and smarter spending by citizens.