What is, then, the science of happiness? I’ll summarize the basic eight points as best I can, but read the actual paper (pdf) to obtain the citations and details on the underlying studies underpinning each of these principles.
1. Buy experiences instead of things
Things get old. Things become ordinary. Things stay the same. Things wear out. Things are difficult to share. But experiences are totally unique; they shine like diamonds in your memory, often more brightly every year, and they can be shared forever. Whenever possible, spend money on experiences such as taking your family to Disney World, rather than things like a new television.
2. Help others instead of yourself
Human beings are intensely social animals. Anything we can do with money to create deeper connections with other human beings tends to tighten our social connections and reinforce positive feelings about ourselves and others. Imagine ways you can spend some part of your money to help others – even in a very small way – and integrate that into your regular spending habits.
3. Buy many small pleasures instead of few big ones
Because we adapt so readily to change, the most effective use of your money is to bring frequent change, not just “big bang” changes that you will quickly grow acclimated to. Break up large purchases, when possible, into smaller ones over time so that you can savor the entire experience. When it comes to happiness, frequency is more important than intensity. Embrace the idea that lots of small, pleasurable purchases are actually more effective than a single giant one.
4. Buy less insurance
Humans adapt readily to both positive and negative change. Extended warranties and insurance prey on your impulse for loss aversion, but because we are so adaptable, people experience far less regret than they anticipate when their purchases don’t work out. Furthermore, having the easy “out” of insurance or a generous return policy can paradoxically lead to even more angst and unhappiness because people deprived themselves of the emotional benefit of full commitment. Thus, avoid buying insurance, and don’t seek out generous return policies.
5. Pay now and consume later
Immediate gratification can lead you to make purchases you can’t afford, or may not even truly want. Impulse buying also deprives you of the distance necessary to make reasoned decisions. It eliminates any sense of anticipation, which is a strong source of happiness. For maximum happiness, savor (maybe even prolong!) the uncertainty of deciding whether to buy, what to buy, and the time waiting for the object of your desire to arrive.
6. Think about what you’re not thinking about
We tend to gloss over details when considering future purchases, but research shows that our happiness (or unhappiness) largely lies in exactly those tiny details we aren’t thinking about. Before making a major purchase, consider the mechanics and logistics of owning this thing, and where your actual time will be spent once you own it. Try to imagine a typical day in your life, in some detail, hour by hour: how will it be affected by this purchase?
7. Beware of comparison shopping
Comparison shopping focuses us on attributes of products that arbitrarily distinguish one product from another, but have nothing to do with how much we’ll enjoy the purchase. They emphasize characteristics we care about while shopping, but not necessarily what we’ll care about when actually using or consuming what we just bought. In other words, getting a great deal on cheap chocolate for $2 may not matter if it’s not pleasurable to eat. Don’t get tricked into comparing for the sake of comparison; try to weight only those criteria that actually matter to your enjoyment or the experience.
8. Follow the herd instead of your head
Don’t overestimate your ability to independently predict how much you’ll enjoy something. We are, scientifically speaking, very bad at this. But if something reliably makes others happy, it’s likely to make you happy, too. Weight other people’s opinions and user reviews heavily in your purchasing decisions.
Happiness is a lot harder to come by than money. So when you do spend money, keep these eight lessons in mind to maximize whatever happiness it can buy for you. And remember: it’s science!