Can Money Buy Happiness?

We’ve all heard the phrase “money can’t buy happiness,” but is it true?

Actually, yes, it is. Okay, short post today. Thanks for reading. See you again on Monday.

Just kidding. That’s not all there is to say on the subject.

While money can’t directly buy happiness, it’s literally the currency we use to interact with each other. We are more broadly connected in an economy than a community. This means there are ways of using money that are more likely to lead to well-being than others.

Unfortunately, some of the ways that money can be leveraged for happiness are subtle and we miss them. Even worse, some of the ways we find it natural to spend money are actually dead ends that keep us trapped in a spiral of misery.

Today I want to point towards some of the ways of using money that are more likely to lead to happiness. And to steer us clear of the dead ends.

But let’s start with the fun part. Here are the ways that money can basically be said to buy happiness:

Buying Back Your Time

Money can buy many things, but the greatest thing it can buy is freedom.

At the end of your life you won’t wish you had more money, but you’ll probably wish you had more time.

One approach is financial independence: Saving up enough to never have to work again.

This is certainly a great approach, but it’s hard to pull off. If it’s your only strategy, you might find yourself stalled out for a long time. I think Ramit Sethi makes a good point here:

People are more interested in the idea of buying their time back than actually buying it back

— Ramit Sethi (@ramit) September 30, 2021

So what are some ways you can buy back your time?

How about paying people to do things you can’t stand doing. If you really hate mowing your lawn, why don’t you outsource that task?

If you hate cleaning, hire a cleaner.

Another approach is to scale down the amount of time you spend working. Depending on the situation, this could lead to less income. That’s your version of buying back time.

Strengthening Connections

Human beings are social creatures.

There is absolutely, positively no way around this fundamental truth about human nature. I’m the biggest introvert you’ll ever meet and I wholeheartedly attest: Humans are social creatures.

This means that the quality of your life will be determined in large part by the quality of your relationships.

And you can use money to strengthen relationships.

Treat someone to dinner. Send them a “thinking of you” or “just because” gift. Of course, the point isn’t the money, it’s taking the time to think about how to bless someone else that actually cultivates strong relationships. Money is just the tool you use to turn those thoughts into reality.

And yes, husbands, this does imply that you should go buy some flowers for your wife. Or chocolates. Or whatever she likes. You know her better than I do.

This fall has been unbelievably busy (and October is about to be way busier than September). One couple we’re friends with noticed and offered to babysit our kids and send my wife and I off with $50 for a date. Their generosity not only enabled my wife and I’s connection, but it strengthened or connection with the givers. We’re touched that they were thinking of us.

I often talk about investing in the literal, traditional sense. But every bit as important is investing time and money into your most important relationships.

Enabling Experiences

You are not yourself. You are at least three selves at the same time:

• The remembering self who looks to the past
• The experiencing self who lives in the present
• The anticipating self who looks to the future

Enjoying life means remembering that the needs of all three selves need to be considered.

Fortunately, experiences do just that.

Experiences and the Anticipating Self

When you plan an experience ahead of time, you get to start enjoying it early.

This is happening right now with my family. We have a trip to Hawaii coming up and the kids coulnd’t be more excited (neither could their parents for that matter). Every day they check in on how many days are left until our vacation.

Last year we had a chalkboard where we kept a running countdown to various fun events: Vacations, birthdays, trips to Disney, Christmas.

We should probably bring that back.

Experiences and the Experiencing Self

Have you ever noticed that you can drive home from work, and when you get there you completely forget how you got there? It’s like you can’t remember the commute at all, even though it literally just happened and took 20 minutes.

This is called a memory sink. I first learned about this concept from a book called Off the Clock by Laura Vanderkam. The idea is that routines are useful because they let us be more productive, but when enough “sameness” stacks up, it all gets consolidated to a single memory.

So all your commutes to and from work are one commute. All your days at that dead end job are one day.

This can eat years from your life.

But something odd happens when you go somewhere new. The days slow down. In a good way. Every stage of the day becomes an event. Getting lost on the way to breakfast is an event. Breakfast itself is an event. Walking around is an event.

Everything is new, and therefore everything is noteworthy. You can’t just ignore your surroundings anymore. You’re out of your element. You’re disconnected from your routine. You have to engage with what’s around you.

It’s one thing to tell someone to “be more present.” It’s something else entirely to rip them out of their familiar surroundings and make them be more present

Experiences and the Remembering Self

The beautiful thing about experiences is that the fun doesn’t have to stop just because the experience does. Some of the enjoyment is captured forever in memory.

Escaping a memory sink through the power of experiences is like planting a little memory oasis in the middle of a memory desert.

I tend to write about my trips in my journal. Every now and then I’ll go back and look at these entries and get hit with a flood of positive memories. This is so powerful that it can even turn negative experiences into positive memories.

One of my favorite examples comes from what started out as a terrible day at Disney.

We had a terribly morning where everything seemed to go wrong. During all the chaos, there was one seemingly insignificant moment that I will now never forget. As I was fighting through traffic outside the Magic Kingdom, my son pointed to a bus that featured the Avengers and said “Look dad, I see Thor.” I replied “that’s nice son” and went back to being stressed out about what a tough morning we were having.

Somehow, we rallied from a bad start to the day and had a great time at the Magic Kingdom. As we were leaving the park, I asked everyone what their favorite part of the day was. My son said “seeing Thor.” My wife looked confused and said “but we didn’t see Thor.” I couldn’t help but chuckle as I turned to her and said “he means on the side of the bus on the way in.”

We still laugh out loud when I read her that entry from my journal.

Turning a negative experience into a positive memory. That’s the power of the remembering self.

Experiences vs. Things

The problem with things is how quickly you get used to them. Today’s shiny new toy is tomorrow’s unsightly clutter.

Ironically, the best way to enjoy things is before you buy them. The anticipating self can look forward to a purchase. The remembering self will almost invariably be disappointing by it.

Frequency vs. Intensity

I’ve mentioned that I’m going to Hawaii. It’s not the kind of trip that I can take very often with one income supporting a family of five. It takes a lot of careful planning and resource allocation.

The trip is going to be great, but these kind of flagship experiences aren’t the only or even the best way to leverage the power of experiences.

Instead of one big adventure, you can scatter dozens of microadventures throughout your year.

Maybe on Friday night instead of ordering a pizza you drive to the next town over and try their best pizza place. Maybe you make a point of finding somewhere in town that you’ve never been to.

Lots of smaller trips means lots of things to anticipate, remember, and experience throughout the year.

The same concept applies to purchasing things. We’ve just covered how things often fall short of experiences. But we also saw that “just because” gifts can be great investments.

It’s worth thinking about how to switch from a flagship approach to a frequency approach when buying things. One big offender here is weddings. In the book All the Money in the World, Laura Vanderkam points out that many people spend more on flowers for their wedding than they spend on “just because” flowers for their entire marriage.

By the way, that’s the second time I’ve mentioned Laura Vanderkam. You should probably go buy one of her books.

Book Review: All The Money in the World

Periodic Indulgences

You know what they say: Treat yo’self.

Just don’t do it all the time. Let the anticipating self anticipate for a while.

The way I like to look at indulgences is with a framework called the barbell approach.

The idea is simple. Most of your time should be spent in moderation, balanced by voluntary deprivation on one side, and indulgence on the other.

A great example would be intermittent fasting and time restricted eating.

Five days a week I practice a form of time-restricted eating where I restrict my eating window to eight hours (usually noon-8pm). One day a week I practice voluntary deprivation with an OMAD day (“one meal a day”). I balance that with one indulgent day a week, usually Saturday. Saturday starts with Dunkin’ Donuts. That’s the kind of vibe I’m going for.

I also practice voluntary deprivation with three-day, water-only fasts once a month. Trust me, enough “feast days” naturally work their way into my life to balance out the barbell.

Generosity

Jesus once said that it is more blessed to receive. Whatever your opinions are on Jesus, it’s an idea worth thinking about.

We’ve already talked about using your money to strengthen relationships. Now we’re talking about using money simply to help others, even if you’ll never meet them.

The fact is that there are a lot of needs in this world. Some of them could use your time and talents to address, but many can be ameliorated through your financial generosity.

Giving is taking a small step from being part of the problem to being part of the solution.

There’s a deep sense of rightness that accompanies giving that’s hard to replicate anywhere else.

The Dead Ends

We’ve talked about some of the best ways to use money to maximize happiness. Here are some of the worst.

Status symbols

This is keeping up with the Jonses. It’s buying stuff you don’t use to impress people you don’t like.

My favorite example is the man in the car paradox from the book The Psychology of Money by Morgan Housel. The idea is that you see someone in an expensive car and you wish you could have a car like it so that people would admire you.

Except you’re not admiring the man in the car. You’re just imagining yourself with his stuff.

It’s worth pursuing admiration and respect, but they can’t be bought. They have to be earned.

Wishful Fantasies

Have you ever bought something in anticipation of the kind of person you want to become?

• If I buy a house with a big kitchen and dining room, we can entertain guests
• If I buy a new pair of running shoes, maybe I’ll become a runner

Here’s a secret for you: Spending money isn’t a shortcut around doing the hard part. The hard part of entertaining is inviting people over. The hard part of running is running.

Start entertaining. Start running. Do the best you can with what you have. When you’re regularly running and your current shoes are no longer getting the job done, now you can upgrade. Otherwise you’re going to buy an expensive pair of shoes, run twice, and clutter your closet forever.

Final Thoughts

Spending more money doesn’t guarantee more happiness. But money is a powerful tool in society and can be leveraged in many ways to enhance your well being.