5 simple money habits that make you happier

Jul 17, 2014

We all know that freelance jobs come in waves (are our clients conspiring together somewhere?), so we are often reminded to save, save, save.

Saving is good and you should of course do that. But did you know that there are ways that to spend money that can promote well-being, too?

Professors Elizabeth Dunn and Michael Norton wrote a whole book devoted to the subject called Happy Money: The Science of Smarter Spending. It’s a fascinating look at why we spend -- and how we can stop buying out of compulsion and start buying out of joy.

Here are some of the book’s key findings:

1. Spend money on others

According to the authors’ research, buying a surprise gift for a friend or family member will make you happier than spending the same amount on yourself – and it’s a super New Mutualisty thing to do!

2. Buy time, not things

Studies show that people get more happiness from experiences – like travel, concerts, and fun events ­– than we do from buying material possessions, like stuff.

3. Underindulge

Indulging yourself too frequently can make you unhappy, the authors found. Instead, spreading out the spending will cause you to get a “spike” in happiness each time, making you feel happier overall. In other words, buying something compulsively won’t make you feel as good as the occasional treat will.

To that point, LearnVest made a fun “This or That” calculator that will tell you how much you could buy with the extra money you have by changing tiny habits, such as getting a morning latte. (Warning: this app is also terrifying if you like to eat out a lot.)

4. Purchase in advance

Subscription services, pre-ordering new products, and supporting Kickstarter campaigns are all common ways that people purchase things in advance. But did you know that this practice can actually make you feel better?

Studies show that getting things that you’ve bought ahead of time will make you happier than if you pay for the item when you get it. The theory goes that distancing yourself from the “payment” aspect of buying a new object reduces the dread of debt, but increases the happiness connected with possession.

5. Temporarily give something up

In one study, students were asked to eat chocolate, then give it up for a week, then eat it again. The students who gave chocolate up temporarily enjoyed the chocolate much more than the students who were allowed to eat it all week. The authors call this the “candy corn” affect because things that are only available for a short time (candy corn) are more appealing because we’ve “missed” them.

So if you want to get more happiness out of something you buy, try taking a break from it. Don’t eat out this week, and reward yourself by having one dinner out with friends at the beginning of next week. Chances are you’ll enjoy that meal more!

Freelancers, what are some things you actually enjoy buying?