How to Get More Happiness from Less Stuff

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The Psychology of Money and Happiness

By: Jeremy Shapiro

The economic downturn has produced a surge of interest in smart shopping and money management, as everyone searches for ways to buy more stuff with less money. These strategies can only accomplish so much. We also need ways to get more happiness from less stuff.

There is nothing like an economic downturn to get people interested in money. Household budget planners have become tighter for millions of Americans, but the tastes we acquired during the boom years have not diminished along with our net worths. We still want our lattes, restaurant dinners and flat-screen TVs. At the same time, we’ve become painfully aware of the dangers of borrowing too much and saving too little. How can we adapt to this new reality without sacrificing something more important than money: happiness?

Personal finance experts offer advice about smart shopping and money management, and this advice can help, but for most people there is no escaping the necessity of buying less stuff. Unfortunately, a grit-your-teeth and just-say-no approach to thrift solves a financial problem but creates a psychological one: like a harsh diet, it leaves us feeling deprived and unhappy.

A psychological problem requires a psychological solution. Fortunately, help is emerging from two new, hot areas of research: the psychology of money and the psychology of happiness. The key to living well in today’s hard times is to make the psychology of money and well-being work for you.  Here’s how.

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Know the Facts

Does money buy happiness? The answer is yes and no. As people move from poverty to the middle class, money really does buy happiness, but once this point is reached, additional income does not produce significantly more well-being. Middle-class people are happier than the poor, but the rich are not happier than the middle class.

Don’t believe it? That’s exactly what the researchers predicted. People generally believe they need to increase their incomes by about 30 percent to be financially satisfied. The peculiar thing is that the percentage is the same across income levels. People who make $30,000 per year think they would be happy if they made $40,000, and people who make $200,000 think they need $260,000. Lottery winners experience an initial burst of euphoria, but then their happiness levels return to baseline and stay there. This phenomenon is called “the hedonic treadmill.”

Get Off the Treadmill

Although a moderate level of wealth is important for well-being, it is hard to know when the point of diminishing returns has been reached. Standing among the sweaters, we look at that wool/cashmere blend and think, “I do have a number of sweaters at home, but nothing quite like this – and  I really think buying it will make me happier.”

If our orientation toward material things is the more the better, and nothing but the best, we’ll be stuck on the treadmill forever. People who are contented with their material lives have a different orientation: Their goal is to have the right amount of possessions that are good enough. When they reach this point, they hop off the treadmill.

Enjoy Non-Material Things

Material wealth is a means, not an end; the goal is happiness. When we use non-material means to achieve gratification, our thirst for products is diminished. Research has identified activities that significantly increase well-being, none of which is expensive:

  • Increase quality time with family and friends
  • Join social groups such as book clubs and volunteer organizations
  • Write a “gratitude list” regularly
  • Perform acts of kindness for others.

Enjoy Material Things More

What? Isn’t materialism the whole problem? Not exactly – The problem is ineffective materialism. People who overspend do not enjoy their possessions too much, they enjoy them too little. It’s the material things they don’t have that seem wonderful; they love the sweaters in the store, not the ones in their closet. Happily thrifty people make friends with their possessions; they get pleasure and satisfaction from the things they already own, which is why they aren’t constantly yearning for more.

Like overeaters who eat when not hungry and gulp their food, overspenders buy more and more in pursuit of that elusive feeling called, “enough.” Ineffective materialism is like an addiction, so big spenders need to buy increasing amounts of stuff just to feel okay. Happily thrifty people are like healthy eaters who eat only when hungry, take small bites and chew their food well, so they get maximum pleasure from minimum calories.

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Know Your Stuff

How well do you know what you already own? If you are curious, take a careful inventory. Go through your closet and count your shoes, pants and skirts. Go through your home and count your books, DVDs and objets d’art.

Next time you contemplate a purchase, place the decision in the context of what you already own. If you only have 10 pairs of shoes, buying one more could make a positive difference to your wardrobe. If you already have 50 pairs, making it 51 doesn’t seem like much of an accomplishment, especially if your finances are tight.

Use Your Stuff

If saying no to a purchase leaves you feeling deprived, shift this blocked energy toward the enjoyment of things you already have. Return to your stock of possessions. When was the last time you wore that sweater or listened to that CD? Have you made good, full use of it? Ironically, the more new things we buy, the less we can use what we already own.

Overspending is driven by a restless desire for novelty. Mindfulness allows us to appreciate the familiar things we might otherwise take for granted. Maybe this will mean steering your car away from the mall and toward the health club you seldom use, or clicking off eBay to relax in the backyard you landscaped so carefully. Appreciating what we have reduces our need for more, so we can bolster our personal balance sheets while getting more happiness from less stuff.

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Jeremy Shapiro, Ph.D., is a psychologist and adjunct faculty member of Case Western Reserve University. He has written four books and numerous scientific/professional articles on topics related to psychotherapy. He also directs the website, YouCutTheBudget.com.

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