The Blog

Money and Happiness: The New Connection

As it turns out, spending money on many small experiences rather than on one big-ticket items (like a new car or flat-screen TV) may yield more happiness in the end.
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Today, at 2 PM, I will sell my two-bedroom Condo in Park Slope Brooklyn. This is not a new experience. I bought and sold real estate in New York City throughout the mid 1990s and 2000s in order to put myself through graduate school, pay for my son's private school education and monetarily supplement my income as an artist and college professor. I have been very lucky -- and savvy -- managing to use my skills as a dancer/choreographer to feel-out spaces (a la Richard Florida's Rise of the Creative Class). I've stay ahead of the New York City housing trends, and now I am ready to get out.

I'm primed to channel my creative skills elsewhere as it seems I am perhaps [again] ahead of the trend. Two recent studies indicate that we find happiness not by owning [things] but by doing [things]. Scientific America published an article entitled, Can Money Buy Happiness? New research reveals that reminders of wealth impair our capacity to savor life's little pleasures. According to author, Sonja Lyubomirsky, "although wealth may grant us opportunities to purchase many things, it simultaneously impairs our ability to enjoy those things."

Citing a study led by Jordi Quoidbach, published in Psychological Science, Lyubomirsky concludes that "the most effective, empirically-supported ways of spending money to increase happiness include:

• Spending our money on activities that help us grow as a person (taking guitar lessons, investing in an entrepreneurial venture), strengthen our connections with others (dinners with colleagues, car trips with friends, roller blades for mom and child), and contribute to our communities (catering a fundraiser, donating to the needy).

• Shelling it out on activities and experiences (e.g., rock climbing expeditions, wine tasting family reunions) rather than material possessions.

• Spending it on many small pleasures (e.g., regular massages, weekly delivery of fresh flowers, or frequent phone calls to our best friend in Europe) rather than on one big-ticket item (like a new car or flat-screen TV).

• Splurging on something that we work extremely hard to get and have to wait for (whether it's a concert, trip, or gadget) and relish the feeling of hard-won accomplishment and anticipation as we wait.

Meanwhile, as reported in The Cornell Daily Sun, Professor of Psychology, Tom Gilovich, and graduate student Travis Carter recently published their findings in the Journal of Personality and Social Psychology that "Purchasing experiences leads to greater long-term enjoyment than buying material possessions." After conducting several studies over the course of two years, Gilovich and Carter have come to believe our memories are a much more essential component of our emotional well being than our purchases.

"The idea behind the research is that experiences -- concerts, vacations, meals at restaurants -- tend to be ultimately more satisfying than spending money on material possessions -- [i.e.] clothes and jewelry," Carter said.

The concept of our experiences fueling our well-being, and lack thereof, is not new. In the UK, the Whitehall Studies link social rank, in the context of the work place, to mortality and quality of health. Briefly, subordinates suffer higher rates of heart disease and diabetes than their superiors even though they are privy to exactly the same level of health care. The studies factor in personal choices, such as smoking and nutrition, and still the fact remains: the less empowered one feels to make choices, the poorer one's health becomes. Apply this to the ideas of ownership vs. experience and you have either a recipe for disaster or the tools to take back control of your life where you can. Changing your boss may be hard. Choosing not to take on car payments, credit card debt and mortgages, or at least minimize them, is easier.

Today, I survey my home, a rented apartment in the East Village, and thank my landlord. As I remember 14 years of ownership experiences: properties sprouting leaks, broken sewage pipes, unruly coop boards, building-wide lawsuits, and assessments. All I have to do now is pay my rent and my landlord takes on all of the headaches, the mortgage, and the maintenance of my living space. By this evening, there will be money in the bank and I will be free. I feel better already.

This article is the continuation of an on-going exploration of choices and opportunities we have to better understand and participate in: health, art, education, and our communities. I look forward to continuing the conversation.