‘Happy Money’ & The Path to Joyful Spending (and Saving!)

Part 1: Make it a Treat!

Let’s hope all of our purchases bring us this much joy.

Are you ready for a visualization exercise? Think of the last time you felt truly happy. Be specific. Think of where you are, what time of day it is, and what exactly you are doing in that moment. Hold that memory in your heart, and truly feel it.

Now, think about the last time you spent discretionary money. “Fun” money, if you will. Money not needed for bills or your basic needs. Think of where you are and what time of day it is, and what exactly you spent your money on.

How did those two feelings compare? Which feeling has real staying power in your memory?


The book Happy Money: The New Science of Happier Spending, by Elizabeth Dunn and Michael Norton, pieces together the research of the past 20 years in the studies of money, psychology, and lasting happiness. The idea behind the book and their collected research is: how can we combine those two situations - spending fun money and lasting happiness? How can we spend for a maximum happiness return per dollar spent? An HROI, if you will — “Happiness Return on Investment”.

Sure, the obvious reason could be “Buying things DOES make me happy! I feel so happy when I buy new shoes/a new car/a new toy!” But does it provide real, lasting happiness, or just a fleeting pleasure that diminishes as quickly as it came? As Americans, we are born into a culture of consumerism and told that buying this or that will make us infinitely happy. We admire high-paid, glittering rich celebrities and athletes, and think that their badges of success will provide lasting happiness. The mansion, the cars, the clothes, the jewelry. Does buying all of this really maximize our happiness per dollar spent?

However, in America, average incomes have risen dramatically over the past 50 years, and yet, our happiness has not. We have started chasing higher incomes in pursuit of higher happiness. We have the highest standard of living the world has ever seen, and higher incomes to go with it. Yet recent research has shown that a $75,000 annual salary is the threshold beyond which increased income has no significant impact on day to day happiness. The authors of Happy Money are not suggesting we stop consuming, or that we stop getting more money. Rather, Happy Money suggests that use the money we already have to get more happiness.

There are a total of five tenets in the book which I will share over the course of a five part series. Today, we will talk about:

1. Make it a Treat, or Plateau of Pleasure at Starbucks

The exponential rise in online shopping has taken away our capacity to savor our purchases. We can get whatever we want, whenever we want, thanks to Amazon Prime and Postmates, and it’s EASY. We feel almost no pain with parting with our money thanks to Apple Pay. But what about pleasure? What happened to savoring purchases, or simple pleasures? In Spanish, the word for this is aprovechar — you can aprovechar a meal, a coffee, or even a Hershey’s kiss. Learning to “make it a treat” can help us enjoy our purchases again, and also help us save some money in the mean time.

How many of you have heard the personal finance advice of “Stop buying $4 lattes and you’ll save $1200 a year!”? Right. My first reaction is usually, “Stop trying to micromanage my spending, financial gurus!” However, the research in Happy Money shows that reduced consumption does not lead to more happiness; altered consumption does. An example of this is my Starbucks pleasure plateau. I am a coffee lover. I’m not sure you could ever tear me away from caffeine, and if you do, it isn’t pretty, especially in the morning. I used to go to Starbucks every single morning for 3 years. At first, a Grande Skinny Vanilla Latte was all I needed to feel joy in the morning. And 3 years later, I could care less and kept wondering where all my money was going. This is when I learned: Abundance is the enemy of Appreciation. Now, I brew my own coffee with an Aeropress every day (just as delicious) and “treat myself” (#treatyoself2016) to a latte at Starbucks about once a month. I learn to savor that Starbucks treat while saving myself a few hundred dollars a year.

The psychology behind Making It a Treat is that most people imagine an unchanging sea of delight when purchasing a product. They think it will make them just as happy the 20th time as it does the 1st. But usually, this pleasure drops off. Making our purchases a treat, whether as small as a Starbucks Latte or as large as a joyride in the new car, helps us combat the ennui of buying products.


Next time, we will talk about “Buying Experiences”, and how planning that trip to Burning Man probably has a higher happiness payoff than that new iPhone 7.