Happy spending: How to budget for a better you
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Dilemma: You have $40 left after your monthly restock of PB&J supplies; you want to tag along with your bio partner for an Intro to Rock Climbing class, but you could use the practical and emotional boost of new jeans. Your account balance says it’s either the jeans or the climbing class. How do you decide?
Doing stuff is better than buying stuff
Ultimately, we all get to choose how we spend our disposable income, even if there’s not much of it. And it’s our experiences, not our possessions, that are our main source of happiness and our sense of who we are, research shows. “Nobody would say that your identity is the kind of car you drive,” says Dr. Sonja Lyubomirsky, a social psychologist at the University of California, Riverside, and author of The Myths of Happiness (Penguin, 2013). “Who you are as a person is more about all the experiences you’ve had throughout your life.” In a 2009 study, students reported that experiences made them feel more alive than possessions did, according to the Journal of Positive Psychology.
OK, we get it: The thrill of the climbing wall trumps the new jeans. Being suspended in the air with the adrenaline junkies is what will shape you, help you connect with others, and leave you with stories worth sharing. And that’s just the beginning. For nine ways to spend your money (and your time) on what will expand your identity and happiness, instead of your clutter, read on.
More good news: Happiness is accessible, and the college years are the perfect time to go get it.
How? By gathering experiences, not stuff. Why? A bunch of reasons:
- We are our experiences
“Who you are is the sum of your experiences but not the sum of your things,” says Dr. Sonja Lyubomirsky, a social psychologist at the University of California, Riverside.
- We value our experiences
“Even when an experience goes wrong, we appreciate it. “People tend to focus on what they learned or how they grew as a result of something negative,” says Dr. Lyubomirsky.
- Experiences have staying power
“Even though [our things] last physically, it’s our experiences that live on in the identity we form and the connections we make,” says Dr. Thomas Gilovich, happiness researcher and professor of psychology at Cornell University, New York.
- We don’t harshly compare experiences
A 2010 analysis of eight studies confirmed that we tend to ruminate on and compare the stuff we buy more than we doubt the value of our experiences (Journal of Personality and Social Psychology).
- Experiences help us relate
Experiences often strengthen our relationships. “The social aspect is really one of the keys to happiness. Shared experiences can do a lot, and people can anticipate and reminisce about them together,” says Dr. Lyubomirsky.
9 ways to stop buying stuff you don’t need
1. Choose experiences that contribute to your awesomeness
Trying something new, pushing yourself, developing a skill—these experiences are usually worth the investment. Your everyday blah has less to give you, experts say. “Think about the experience of watching TV and having an identity of ‘I’m a TV watcher.’ How gratifying is that? Not terribly,” says Dr. Thomas Gilovich, happiness researcher and professor of psychology at Cornell University, New York. “But if you’re out in the wilderness camping with friends and have the identity of ‘I’m adventurous,’ that’s likely to be very gratifying.”
2. Look for ways to connect IRL
Start a hiking group that meets on weekends, or join a tennis league. If you’re a big reader, try a book club to add the social element. Sometimes, we need to purchase items in order to access formative experiences. Those hiking boots or the latest J. K. Rowling novel will set you up for self-discovery and maybe new friends.
3. Cherish the good times
This is totally free and can up your happy. Record your thoughts, insights, memories, and stories in a place you can revisit—like a journal, blog, or note-keeping app. Print some of your photos (yes, you can still do that) and keep them visible so you recall those good times.
4. Value experiences that don’t cost a whole lot
Good news: “A lot of experiences that provide happiness aren’t very expensive,” says Dr. Gilovich.
- Look within and beyond your campus walls: Find parks, trails, beaches, pools, PokéStops, and so on. “Take advantage of these settings for a gratifying break from the grind that school can be,” says Dr. Gilovich.
- Can’t go rock-climbing in the Peruvian mountains? Reading about an experience looks much the same on brain scans as actually having that experience, according to a 2011 study in the Annual Review of Psychology. Bonus points: Reading builds our empathy (enhancing our relationships) and emotional health, and puts us into a relaxed, meditative state, studies show.
5. Before you swipe, ask yourself three questions
- Shape: How likely is it that this purchase will shape who I am, help me grow and learn, or help me see myself in a positive way?
- Connect: How likely is it that this purchase will expand my crew or strengthen my relationships?
- Share: How likely is it that I will remember and tell epic stories about this purchase?
6. Are you pumped up, bummed out, intoxicated, cranky, or bored?
Then be wary of going near your Amazon wishlist—you’re more likely to make impulsive purchases and experience buyer’s remorse, according to a 2014 survey (CreditCards.com). Shopping is best done with a calm mind.
7. Consider the downsides of stuff
- Possessions cost time, as in the time you had to work to make the money to pay for them.
- Stuff can happen to stuff: iPhones fall in toilets, jeans rip in unfortunate places, and flat screens mysteriously go missing. Which is all pretty stressful.
- The pleasure of new items fades quickly, according to a 2009 study in the Journal of Positive Psychology.
- Possessions may become associated with regret, negative comparisons, and envy.
- Possessions may become clutter. In a study involving 60 women, clutter was associated with higher levels of cortisol, a stress hormone, and a depressed mood, according to the Journal of Personality and Social Psychology (2010).
8. Do your research before you buy
OK, fine, you do need some things, like pants. When students researched a product before buying, they experienced less buyer’s remorse, in a study by a researcher at Kansas State University (2011).
The pleasure of clean, organized space may make it easier to stop buying things you don’t need. Marie Kondo, author of the bestselling book, The Life-Changing Magic of Tidying Up (Ten Speed Press, 2014), recommends pulling out everything you own and asking yourself, “Does it spark joy?” Yes? Keep. No? Donate, recycle, or toss.
So we can’t buy happiness—fine. But let’s not pretend money is irrelevant. Really, we’re talking about having a good life in ways you can sustain. And that’s important, because expanding your happy expands a whole lot of other things too, like your resilience—your ability to deal with the not-so-good stuff.
Research suggests that “in-the-moment positive emotions” (such as affection, curiosity, compassion, love, and amusement) build our coping resources—our ability to handle challenges and stress. This in turn gives us access to a more satisfying life.
“Happier people are healthier, more productive, more creative, and more charitable. They have more successful relationships and make more money. The evidence is pretty strong that good things come to those who are happier.”
—Dr. Sonja Lyubomirsky, social psychologist, University of California, Riverside, and author of The Myths of Happiness (Penguin, 2013)
“There are so many other things I could spend my hard-earned money on. But will I remember the feel of a shiny new car, or the tears of joy as I paraglided through the Swiss Alps? I spend my money on experiences that make me feel alive.”
—Kira Collings, second-year dietetics student, Utah State University
Follow us on Instagram, and don’t forget to use the hashtag #happyspending
Online tool and app for managing money: Mint.com
Apply happiness research to your own life: Greater Good Science Center
Pursue happiness and good habits: Gretchen Rubin
Quitting the consumer culture: Center for a New American Dream
Interactive modules on money stuff: FoolProof Financial Education Systems
Student budget calculator: Bankrate.com
13 ways to print your Instagram pics: ReadWrite
Thomas Gilovich, PhD, professor of psychology, Cornell University, New York.
Sonja Lyubomirsky, PhD, professor of psychology, University of California, Riverside.
Carter, T. J., & Gilovich, T. (2010). The relative relativity of material and experiential purchases. Journal of Personality and Social Psychology, 98(1), 146–159. Retrieved from https://www.ncbi.nlm.nih.gov/pubmed/20053039
Dovey, C. (2015, June 9). Can reading make you happier? The New Yorker. Retrieved from
Gilovich, T., & Kumar, A. We’ll always have Paris: The hedonic payoff from experiential and material investments. In: James M. Olson and Mark P. Zanna, (Eds.) Advances in Experimental Social Psychology, Vol. 51. Burlington: Academic Press, 2015, pp. 147–187.
Howell, R. T., & Hill, G. (2009). The mediators of experiential purchases: Determining the impact of psychological needs satisfaction and social comparison. Journal of Positive Psychology, 4(6), 511–522.
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Kumar, A., & Gilovich, T. (2014). Talking about what you did and what you have: Differential story utility from experiential and material purchases. In Simona Botti and Aparna Labroo (Eds.), Advances in Consumer Research, Volume 41. Duluth, MN: Association for Consumer Research. Retrieved from
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Merzer, M. (2014, November 23). Survey: 3 in 4 Americans make impulse purchases. CreditCards.com. Retrieved from
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Student Health 101 survey, July 2015.
Van Boven, L., & Gilovich, T. (2003). To do or to have? That is the question. Journal of Personality and Social Psychology, 85(6), 1193–1202.