Only if you spend it correctly.
Perhaps not what you expected me to say. But here’s the catch: You can only “buy” happiness if you spend your money on time, travel and experiences, or others, according to science.
1. Time: The first study (1) discovered that those working people who were willing to part with money ($40) to outsource tasks they don’t enjoy were more satisfied with their lives than if they spent the same money on a material purchase. For some that might be hiring a house-cleaner, a yard helper, or ordering dinner out. The thought is that buying time protects people from the stress of busyness with life satisfaction. And this was true for people of all income levels.
2. Travel and Experiences: Michael Norton, a professor at Harvard Business School and co-author of Happy Money, says that you can spend $2,000 on a fancy TV or $2,000 on a trip. Norton says experiences are better before they happen, while they happen, and after they happen. While you’re waiting for the TV to arrive, you feel frustrated and impatient. While you’re waiting for the vacation, you feel eager and excited.
You’re excited about both the trip and the TV. But what really happens when you buy a TV is that you put it on a wall, and sit on your sofa to watch it. During the vacation, things are not quite as good as your imagining of it, but you’re still out of town, experiencing things with other people, and seeing new sights, which beats the reality of buying a TV.
One study asked people about their honeymoons. The week before, they were very excited; during the honeymoon things were OK but not perfect; the week after it was good. Fast-forward 20 years and suddenly the honeymoon was “amazing”. Our minds so often forget negative experiences.
Experiences simply “get us out of our own heads”. Our perspectives are broadened and we see potential in our lives where perhaps we didn’t before. So save up your money and take the trip to Italy or even the next town over.
3. Others: Norton says that spending money on others, whether we know them or not, is a guaranteed way to boost our happiness. Experiments in Canada and Uganda gave people $5-$20 to spend on themselves or others. Those that used the money to buy something for someone they loved or to give to a charity were much happier than those who spent the money on themselves.(2)