How to Buy Happiness (Part 1)

Part of being smart about money is not just knowing how to save, but also how to spend. After all, money is meant to be spent. But for someone like myself who has such a small discretionary income, spending money is difficult for me so I'm intent on deriving the utmost pleasure from my purchases. In the first installment this two part series I'll share two ways in which I've found that money can in fact, buy happiness.

How? 

Spend your money on experiences not material items.

Why?

The Anticipation- Studies show that the mere anticipation of going on a trip, seeing a concert, or enjoying a good meal boosts people's level of happiness.

Eliminate Comparisons- Every new product on the market (phones, computers, cars, even shoes) are quickly replaced by a newer model. The worth of your purchase is directly correlated to the "newness" of the product and your happiness inevitably decreases as the novelty wears off and others get a newer version of whatever you've got. The same can't be said for the memories you make while taking a painting class or visiting a new city.

Shared Experiences- It's human nature to feel happy while surrounded by the people you love.  And since most experiences involve other people, it's no surprise that more happiness is derived from purchasing an experience rather than material item.

Over the past year, I've challenged myself to spend less on material goods and more on experiences. For a clotheshorse like myself, it's been a bit of a struggle. Last Christmas instead of asking for a gift from my younger brother, I requested he use the money he would have spent on a present to buy a train ticket to visit me in New York. It's hard for me to think of a material good of the same value (about $30) that would have brought me more enjoyment than hanging out with my bro for the day.

Stay tuned for part two where I'll reveal another way that money can buy happiness ;)