Summary: “Be careful with any spending beyond the ‘enough’ point.”
Let’s take a look at the relationship between spending and satisfaction and see what we can learn about whether or not money can buy happiness. For example, what happens as you increase your spending in terms of (a) how much happiness you are buying and, (b) how long the happiness you are buying will last?
Here’s the way things seem to work. If you spend money on fulfilling your basic needs, you get a lot of satisfaction out of the expenditure and the satisfaction lasts a long time. You have, in effect, bought some happiness – so far, so good. As you prosper and begin spending money on comfort items, you still experience some satisfaction, but not as much and it doesn’t last as long. As you become even more prosperous and begin spending money on luxury items…yep…you still experience satisfaction, but not as much and it doesn’t last as long (are you beginning to detect a pattern?).
At this point, prosperous people often shift into a full-blown “more is better” strategy and something unusual begins happening. They discover they must spend more and more to get the same level of satisfaction…and their worldly possessions begin to pile up. As this continues, big spenders eventually reach (allow me to introduce a highly technical term with regard to the science of spending) the “enough” spending level. Any expenditure beyond this amount will usually decrease, rather than increase, happiness. Graphically they’ve reached the slippery slope and “cross over the spending hump.” In other words, their satisfaction curve begins to move in a downward direction with additional expenditures. By the way, I am talking about spending money you have. Buying these things on credit adds significantly to the diminishing returns.
For those of you who have owned multiple houses and cars (as I have in the past), you understand all to well that assets can easily morph into liabilities that require maintenance, insurance and absorb all manner of resources whether you use them or not.
Here are a few ideas to offset this slippery slope. Spend money on experiences rather than things. Spend money on small indulgences that require no ongoing expenditures related to storage, maintenance, insurance, etc. Spend money on other people important to you. Spend money on causes that are important to you. Here’s a radical idea – save money and consider it money spent on buying freedom of choice in the future (see posting on Monkey Traps).
Bottom line, if you want to joyfully participate in life, be careful with any spending beyond your personal ‘enough’ point. Enjoy your money, but make sure it is serving you and not vice-versa. If you are already beyond the ‘enough’ point, I predict you will get more joy from getting rid of things than from acquiring things. Try it and see if it is true for you.
Want to know more about money and happiness? Read Your Money or Your Life by Joe Dominguez and Vicki Robin. Pay close attention to the Fulfillment Curve in the first chapter.
Joyfully participate in life today…Chris