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Spend Your Way to Happiness?

Money and happiness: 5 ways your spending style matters.
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Puddles of Pleasure, Peaks of Presumption continued...

Now, no one is saying that money and spending play a negligible role in happiness. In fact, wealthy people have better nutrition and medical care, more meaningful work, and extra free time, Dunn says.

“And yet, they aren’t that much happier than those who have less,” she writes with co-authors Daniel T. Gilbert and Timothy D. Wilson in an article to be published in the Journal of Consumer Psychology. The article’s title: “If Money Doesn’t Make You Happy, Then You Probably Aren’t Spending It Right.”

So how can you spend your money to maximize happiness? Try these tips, experts say.

Tip 1: Buy experiences instead of things.

Many people assume that filling a large house with possessions will make them happiest. So why might a cooking class or vacation getaway trump a new kitchen floor or TV?

In one recent study, Cornell University researchers found that purchasing an experience tended to improve well-being more than buying a possession, in part because people are more prone to comparisons and buyer’s remorse with material goods.

Also, objects tend to deteriorate with time, but experiences can create lasting memories. If you share lessons or dinners and vacations with others, the social connections can make you happier, too, experts say.

“Experiences are just easier to appreciate,” says Lyubomirsky, who didn't work on the Cornell study. “We are made happier by experiences. You’re more likely to recall it. It’s more likely to become part of your identity. You’re the sum of your experiences, not the sum of your possessions.”

People adapt faster to things that don’t change, such as material objects, Dunn says. But experiences offer more novelty and variety, which can extend enjoyment.

“Whereas cherry floorboards generally have the same size, shape, and color on the last day of the year as they did on the first,” Dunn says, “each session of a year-long cooking class is different from the one before.”

Tip 2: Consider that many small pleasures might be better than a few big ones.

Are you more likely to be happier if you save up for a few big-ticket items, such as a sports car, or if you indulge frequently in small things, such as lattes and manicures?

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