Sometimes financial planners like to give their clients a little homework and one book we recommend is Happy Money: The Science of Happier Spending by Elizabeth Dunn and Michael Norton. This book from behavioral researchers examines the age-old question – Can money buy happiness? Clarity Financial Planning champions holistic financial decision making and financial planning and this involves not just showing you the numbers but also getting you to re-think your money management habits.
Happy Money offers examples of how shifting the focus of how you spend money can maximize your happiness. For the next two weeks we will be writing about lessons learned from this book.
Buy Experiences. We imagine that owning certain things will make us happy without realizing that after a while, these objects may lose their luster. The pleasure burst from buying a luxury car fades as ownership becomes routine. In contrast to the burdens that some possessions bring over time, experiences like a concert, a class to learn a new skill, or a carefully planned vacation can leave us with happy memories and continued joy.
The authors point out that we are often happy with objects…until we see something that seems better. In contrast, we value experiences differently if they leave us with pleasant memories and give us a story to tell. The book discusses hoe sometimes a thing can become an experience if we change how we view it.
Make it a Treat. In the same way that a shiny new car becomes less of a treat when you have to maintain it, anything you “treat” yourself on a regular basis will seem less delightful over time. Suggesting that you buy that fancy latte once a week instead of everyday does more than help you spend less; it conditions you to get more enjoyment out of a treat so you aren’t always looking for the next best thing. Even if you’ve heard this advice before, thinking of ways to apply it to your life can make a difference in how you see yourself and your financial outlook.
Instead of going overboard with treats, are you a person who finds it difficult to treat yourself? Saving money is important but perhaps just knowing that a Fee-Only financial planner is saying it is okay to spend a little may help you lighten up.