Research suggests you do not have to have significant excess funds, nor do you have to spend that much in order to feel happier. The key is what you spend your money on.
The journal Proceedings of the National Academy of Sciences recently published results of a study done by the University of British Columbia (UBC) and Harvard Business School.
The survey of 6,000 people from Canada, the U.S., and Europe showed that working adults who spent even a small amount of money on time-saving services were happier.
Study author, Elizabeth Dunn, a UBC psychology professor, shared some observations.
Dunn suggested the concept of hiring a housekeeper or someone to do other unwanted tasks was obvious.
However, something as small as shopping in a more expensive grocery store, if it is closer and more convenient to home, can add happiness.
Dunn said, “Theoretically what we think is that buying time protects people from the negative effects of time stress in daily life.”
Investing even a small amount of money in something to make your life simpler by giving you more time, can have significant results.
Over one weekend, researchers gave 60 of the Vancouver survey participants $40 to spend on any material item they wanted. Their purchases included wine, clothes, and board games.
The next weekend they were given the same amount but were directed to spend it on something that would save them time. Their purchases included hiring people to cut lawns and run errands.
After each weekend, researchers evaluated the participants’ level of happiness.
Feedback showed there was significantly more joy from spending money on time-saving services than on material purchases.
This finding wasn’t limited to Vancouver.
Over seven studies and 6,000 respondents, spending to buy time-saving services was linked to greater life satisfaction.
The findings are in sharp contrast to how people actually spend their money.
Using the same prompt as the Vancouver study, the researchers asked an additional 98 working adults how they would spend the $40. Only two per cent said they would actually spend money on services that freed up some of their time.
This research is useful because it helps with a financial planning dilemma. The dilemma is whether to spend now or save in order to be able to spend later.
Financial planners will outline the importance of saving a little of what you earn on a regular monthly basis. The deterrent to saving comes from aggressive advertising that attempts to get us to spend freely.
A proper balance of saving for the future and treating yourself to some extras on an ongoing basis is the best approach.
Determine what tasks you perform and which of those are not satisfying. Consider spending some of your disposable income on purchasing these services — perhaps even diverting money typically spent on material things to time-saving services instead.
What is most important to you? Spend accordingly.