How to use money to buy happiness (well, sorta)

Takeaway: To use money to make you happier, spend it on experiences and on other people. Also, try breaking your monthly expenses down into “having” and “doing”, and reflecting on how much happiness the items in each column brought you.

Estimated Reading Time: 1 minute, 40s.

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Spending money on material objects is fun, but buying material objects doesn’t actually impact your happiness all that much. According to Shawn Achor, the author of the book The Happiness Advantage, “money can buy happiness, but only if used to do things as opposed to simply have things”.

How can you use money to become happier? Achor suggests spending money on two things:

  • On experiences, which produce positive emotions that are more meaningful and lasting
  • On other people, which makes you way happier than spending money on yourself (especially when you spend money on experiences with other people)

Research has shown that “money spent on activities—such as concerts and group dinners out—brought far more pleasure than material purchases like shoes, televisions, or expensive watches”. Similarly, participants in a study “who were told to spend [money they were given] on others (for instance, by treating a friend to lunch, buying a toy for a younger sister, or donating to charity) were happier at the end of the day than the ones who had been instructed to spend the money on themselves.”1

What can you do to use this research to your advantage? Achor suggested adopting a budgeting ritual that I personally love:

  1. Break down your monthly expenses into two columns: “having” and “doing”
  2. At the end of every month, review both lists, and think about how much happiness each purchase brought you, and how long that happiness lasted

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At the end of the day, Achor suggests that “you may quickly find yourself wanting to reapportion money from your ‘having’ column to your ‘doing’ column”, especially after you realize how much more happiness and meaning your experiences bring you”.

In my opinion, money is a tool–nothing more. It’s worth taking a step back and evaluating not only how you spend money, but also how how it contributes to your happiness. Money will ever be able to buy you total happiness, but when you use it as a tool to have fun with other people and experience new things, it will no doubt help.


  1. Source: The Happiness Advantage

  • Stock Kevin

    The best money I’ve spent has always been on experiences. In particular traveling outside of the United States.

    • Agreed, I hardly remember anything, but some of my favorite memories are from a solo trip I took to Europe after my first year of Uni. I definitely wouldn’t have such awesome times to reflect back on if I bought a laptop instead.

  • Stock Kevin

    The best money I’ve spent has always been on experiences. In particular traveling outside of the United States.

    • Agreed, I hardly remember anything, but some of my favorite memories are from a solo trip I took to Europe after my first year of Uni. I definitely wouldn’t have such awesome times to reflect back on if I bought a laptop instead.

  • Li-ling

    There’s much truth in the fact that money makes life a whole lot easier, and I love your philosophy that money is but a tool. Interestingly, i recently participated in a game where you had to spend an increasing amount of virtual money everyday, and after a while, I really had to think about what to buy :)

    • Absolutely, there’s a lot to be said about how much marginal enjoyment money will provide you after a point :)

  • Li-ling

    There’s much truth in the fact that money makes life a whole lot easier, and I love your philosophy that money is but a tool. Interestingly, i recently participated in a game where you had to spend an increasing amount of virtual money everyday, and after a while, I really had to think about what to buy :)

    • Absolutely, there’s a lot to be said about how much marginal enjoyment money will provide you after a point :)

  • This certainly makes sense. Money in itself, or the “things” it can buy will never fullfill, they just leave you wanting more.

    But having money and spending it for some pleasures certainly can be a conduit to more enjoyment.

    Personally, I always spend a fair share of my, “luxury” money on travel and sightseeing, and I get a huge deal of joy from this.

    • Beautiful :) Traveling is one of the first frivolous things I’ll be spending my money on after this project is over, that’s for sure! I think you hit the nail right on the head; if you want more stuff than you have right now, buying more crap isn’t going to fix that, because you’ll just carry that same mindset with you however much stuff you buy.

  • This certainly makes sense. Money in itself, or the “things” it can buy will never fullfill, they just leave you wanting more.

    But having money and spending it for some pleasures certainly can be a conduit to more enjoyment.

    Personally, I always spend a fair share of my, “luxury” money on travel and sightseeing, and I get a huge deal of joy from this.

    • Beautiful :) Traveling is one of the first frivolous things I’ll be spending my money on after this project is over, that’s for sure! I think you hit the nail right on the head; if you want more stuff than you have right now, buying more crap isn’t going to fix that, because you’ll just carry that same mindset with you however much stuff you buy.

  • I love this simple piece. I also love Shawn Achor’s book. It was actually gifted to me by a great friend who was in fact happier that I had it than he was to have it. Even though it read it twice. The truth still rings. Doing is always better than having. I believe it as well. Thanks

    • Isn’t it a terrific book? Definitely one of the best ones I’ve read for AYOP of far, so I couldn’t help but share this nugget especially. Happy you enjoyed!

  • I love this simple piece. I also love Shawn Achor’s book. It was actually gifted to me by a great friend who was in fact happier that I had it than he was to have it. Even though it read it twice. The truth still rings. Doing is always better than having. I believe it as well. Thanks

    • Isn’t it a terrific book? Definitely one of the best ones I’ve read for AYOP of far, so I couldn’t help but share this nugget especially. Happy you enjoyed!

  • While I do love getting some nice stuff, most of my favorable stories and memories are inevitably tied to an event/activity. To this day I still remember fondly my first concert, my trip to Spain, weddings, and more. And nobody, not even the repo man, can take away our memories.

    • You got it man! Even though I’m still relatively young, I can recall maybe 10-15 things I’ve bought, but hundreds of meaningful experiences money has bought me.

  • While I do love getting some nice stuff, most of my favorable stories and memories are inevitably tied to an event/activity. To this day I still remember fondly my first concert, my trip to Spain, weddings, and more. And nobody, not even the repo man, can take away our memories.

    • You got it man! Even though I’m still relatively young, I can recall maybe 10-15 things I’ve bought, but hundreds of meaningful experiences money has bought me.

  • I think there’s something called the hedonic treadmill. When we buy something, that happiness doesn’t last because it’s temporary; we’ll in the end go back to our base happiness. A further explanation is we are affected by something called the ‘affective reasoning’ – the tendency to overestimate the happiness we will gain from something.

    It was also said that achievements such as job promotions will go under the hedonic treadmill too.

    Referring to your post, I agree that buying experiences are a better way to get happiness. They are not subjected to the treadmill because we will usually relive the experiences continuously throughout our life.

    People who are getting older rarely talk about the cars or houses they bought in the past (unless they associate it to some sort of experience). If they do, I don’t know what to say.

    • I think you hit the nail right on the head :) The hedonic treadmill is one of my favorite concepts in psychology (I wrote a bit about it and achievement here as well: http://alifeofproductivity.com/becoming-productive-doesnt-make-happier/)

      Money has such an interesting relationship to money and achievement. For example, even though money makes virtually every lottery winner less happy over time, I don’t think a single person (even one familiar with the hedonic treadmill concept like myself) would turn down a lottery.

      That’s why I love little habits like this one, and the others (http://alifeofproductivity.com/5-habits-lead-happiness/) Achor talks about in his book. It’s pretty hard to step off that treadmill when you’re caught up in your life, so it’s nice to build up some happiness habits to serve as a decent safety net :)

  • I think there’s something called the hedonic treadmill. When we buy something, that happiness doesn’t last because it’s temporary; we’ll in the end go back to our base happiness. A further explanation is we are affected by something called the ‘affective reasoning’ – the tendency to overestimate the happiness we will gain from something.

    It was also said that achievements such as job promotions will go under the hedonic treadmill too.

    Referring to your post, I agree that buying experiences are a better way to get happiness. They are not subjected to the treadmill because we will usually relive the experiences continuously throughout our life.

    People who are getting older rarely talk about the cars or houses they bought in the past (unless they associate it to some sort of experience). If they do, I don’t know what to say.

    • I think you hit the nail right on the head :) The hedonic treadmill is one of my favorite concepts in psychology (I wrote a bit about it and achievement here as well: http://ayearofproductivity.com/becoming-productive-doesnt-make-happier/)

      Money has such an interesting relationship to money and achievement. For example, even though money makes virtually every lottery winner less happy over time, I don’t think a single person (even one familiar with the hedonic treadmill concept like myself) would turn down a lottery.

      That’s why I love little habits like this one, and the others (http://ayearofproductivity.com/5-habits-lead-happiness/) Achor talks about in his book. It’s pretty hard to step off that treadmill when you’re caught up in your life, so it’s nice to build up some happiness habits to serve as a decent safety net :)

  • Tomas

    Someone said to me years ago “Buy experiences, not stuff”. It took me a little while to completely understand it, but after all of the travel I have done in the last few years I absolutely get it. Almost to the point where I regret buying my new car!

    • Haha! You’re just going to have to drive it a lot more to turn it into an experience instead of a thing you own ;)

  • Tomas

    Someone said to me years ago “Buy experiences, not stuff”. It took me a little while to completely understand it, but after all of the travel I have done in the last few years I absolutely get it. Almost to the point where I regret buying my new car!

    • Haha! You’re just going to have to drive it a lot more to turn it into an experience instead of a thing you own ;)

  • Exactly my friend. Money is a tool and nothing more.

  • Exactly my friend. Money is a tool and nothing more.

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