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Quick link: the psychology of money and happiness

August 25, 2009

Read another interesting article today about the relationship between spending money and happiness.

“Just because money doesn’t buy happiness doesn’t mean money cannot buy happiness,” says Elizabeth Dunn, a social psychologist and assistant professor at the University of British Columbia. “People just might be using it wrong.”

Dunn and others are beginning to offer an intriguing explanation for the poor wealth-to-happiness exchange rate: The problem isn’t money, it’s us. For deep-seated psychological reasons, when it comes to spending money, we tend to value goods over experiences, ourselves over others, things over people. When it comes to happiness, none of these decisions are right: The spending that make us happy, it turns out, is often spending where the money vanishes and leaves something ineffable in its place.

Yet again, the bullet point summary is:

  • spending on other people is more rewarding than spending on yourself
  • spending on experiences is more rewarding than spending on things
  • more money does bring more happiness, but only up to a point.

All of which things ring true in my experience. And it accords with the article I blogged about a couple of weeks ago.

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