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Best of 'Think' 2013
Thu January 2, 2014
Three Ways Our Spending Habits Are Totally Wrong
It's not just the pursuit of more money that can buy unhappiness. We could be funding our misery with the hard-earned cash we already have.
Elizabeth Dunn, associate professor of psychology at the University of British Columbia in Vancouver, studied how spending habits bear on quality of life for her book "Happy Money: The Science of Smarter Spending." We revisit her conversation with Krys Boyd at noon on KERA 90.1 FM for our series "Best of Think 2013."
So when it comes to spending our hard-earned cash and living our lives, what are we doing wrong? Here are three ways:
1. Too many splurges on the small pleasures -- nail appointments, expensive coffee -- can ruin the experience.
Even if you can afford to stock your calendar and cabinets with favorites, Dunn says overkill will dull your appreciation of those little things more than de-stress you on the regular.
"It turns out that abundance is kind of the enemy of happiness," she says.
2. The new place will wear off -- and so will carefully chosen maple hardwoods.
"One of the most surprising findings in the research that we did is that owning a home or moving to a newer, nicer home seems to have little to no bearing on happiness," Dunn says.
And all those Saturdays spent laboring (and arguing, perhaps) over details -- the kitchen backsplash tile, which gloss of sage green wall paint -- may prove wasted when the novelty's gone.
"These fine-grain distinctions between various products end up having less of an impact on our happiness that most of us tend to assume," she says.
3. Just because you can make the long drive to work doesn't mean you should.
Having a long commute to work is almost as bad as being unemployed when it comes to our happiness, Dunn found.
More about "Happy Money"
Here's a summary of Dunn's book:
If you think money can’t buy happiness, you’re not spending it right. Two rising stars in behavioral science explain how money can buy happiness—if you follow five core principles of smarter spending.
"Happy Money" offers a tour of new research on the science of spending. Most people recognize that they need professional advice on how to earn, save, and invest their money. When it comes to spending that money, most people just follow their intuitions. But scientific research shows that those intuitions are often wrong.
"Happy Money" explains why you can get more happiness for your money by following five principles, from choosing experiences over stuff to spending money on others. And the five principles can be used not only by individuals but by companies seeking to create happier employees and provide “happier products” to their customers. Elizabeth Dunn and Michael Norton show how companies from Google to Pepsi to Crate & Barrel have put these ideas into action.
Along the way, the authors describe new research that reveals that luxury cars often provide no more pleasure than economy models, that commercials can actually enhance the enjoyment of watching television, and that residents of many cities frequently miss out on inexpensive pleasures in their hometowns. By the end of this book, readers will ask themselves one simple question whenever they reach for their wallets: Am I getting the biggest happiness bang for my buck?
Dunn and her co-author, Michael Norton, wrote about spending in this piece for The New York Times.
Listen to Think Monday through Thursday at noon and 9 p.m. on KERA 90.1 FM or stream at kera.org.