“Money can’t buy happiness, but it can make your misery a little more comfortable.”
Or so my father once said.
I have also come to believe that while money can’t buy happiness, it can buy you options. For example, with enough in savings, you may be able to make a different career decision, or you may have peace of mind that allows you to feel free from an employer’s whims or an industry’s downsizing. And, of course, money may allow you to retire early.
But what about the euphoria you feel when you sit in a brand new car or slip on a sparkling piece of jewelry? Psychologists and behavioral economists have conducted studies showing that such boosts of happiness do not last long. There is a concept related to this: the hedonic treadmill.
Social scientists often use the term hedonic treadmill (also known as hedonic adaptation) to illustrate that no matter what happens to you, or what you buy, everyone returns to a so-called set point of happiness.
While a set point can change, it takes some effort and mindfulness. This is where fresh research comes in. “Money can buy happiness if you spend it right,” says Elizabeth Dunn, professor of psychology at the University of British Columbia and co-author of a recent study published by the National Academy of Sciences.
Here’s how it worked: Researchers surveyed more than 6,000 people in the United States, Canada, Denmark and the Netherlands and gave them $40 for two weeks. One week, the survey subjects had to buy a material good. The next week, they were required to spend the money to save time.
People said they felt happier after spending money on housekeeping services, delivery services or car services than on physical objects. Perhaps this helps explain why the gig/service/sharing economy has taken off so quickly. People are experiencing more happiness paying for time-saving conveniences rather than obtaining an elusive object.
Before you send me an email to complain that this is a “1 percent” issue, hear me out. While all four nations in which the research was conducted are wealthy ones, the study found that the income levels of respondents did not change the results: Participants from upper, middle and lower classes found that spending money to save time made them happier.
In fact, those at the lower end of the income spectrum derived even more happiness out of time-saving purchases than those from the upper end. That likely is because they often aren’t able to spend money on such extravagances. Just 28 percent of the people surveyed normally spent money to save time.
None of this is to say that you should be spending recklessly at the expense of being financially responsible. It is not an argument for outsourcing drudgery instead of building up your emergency reserve fund, paying down your debt or saving for retirement.
The research simply compares happiness benefits of paying someone else to do time-consuming tasks to those of buying material goods.
When that’s the choice, you may be better off buying services than stuff.
Contact Jill Schlesinger, senior business analyst for CBS News, at askjill@JillonMoney.com.