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Money may not directly buy happiness, but money can provide choices. If you make choices that reflect your happiness, you can use your money to effectively buy happiness.
If it seems difficult to acquire enough money to buy happiness, rest assured: That is not actually the tricky part. The tricky part of buying happiness is figuring out what makes you happy and planning to buy it. Happiness is not the fleeting satisfaction of purchasing the snack that looks appealing because you are hangry shopping.
Buying happiness means making purchases that will either pay for an expense that provides continuous joy or an event that creates the quality memories that pay “memory dividends”* for years to come.
Buying Unhappiness
Even though most folks you know spend money constantly, they rarely prioritize spending money on happiness. The typical American consumption pattern involves buying a little bit too much house, a little bit too much car, a little bit too much food that rots in the fridge after forgetting to eat it, a little too much takeout or coffee on-the-go, a little too expensive clothes, and a little too many frivolous items from Target. None of it is a lot too much, alone. It may even fall within budget, requiring no debt.
But when your friend asks you to go to Japan, there is certainly nothing left over for that. The destination wedding invite? You wish. Your friend’s 40th birthday party in a suite at a playoff game? Not a chance, you could not possibly drop the cost of your rent on one day.
If having a little too much house/car/food/takeout/clothes/newest T.J. Maxx throw pillow falls within budget and makes you truly happy every day, then enjoy it. If it does not, but you find yourself in the little-bit-too-much lifestyle, why not spend on what makes you happy instead?
This is the craziest part of our unrelenting consumption: A lot of the purchases we make are decreasing our happiness. We regret spending on a certain expense when another comes along that we would have preferred.
What is the best way to prevent that? Figure out what makes you happiest, and buy that instead of the other things!
Flip Your Priorities
If you fall into the American consumption trap of buying stuff you do not value or conveniences you do not need, flip the script. We have seen some budgets where folks’ spending is the complete opposite of their values. If you do not know what your spending values are, our spending review can help you reflect on whether your spending matches your values.
If you already know you value travel, do not value takeout at lunch, do not have money to travel, but buy takeout at lunch, the path to change is clear. Other paths may be less obvious if the extra spending is spread across a number of categories. Start with where you want to spend more money: The amazing source of happiness where you should be spending more provides some great inspiration to find those extra dollars.
Once you identify that inspiration, work to find where you can cut unhappiness spending. Where do you spend on too much house/car/food/takeout/clothes/newest Costco finds? This requires some focus and relentless discarding of creature comforts with fleeting satisfaction.
But the reward is that all-inclusive trip to the Maldives or the gym membership at the luxury gym that inspires you daily and also has amenities that provide you joy.
Spend More?
You should absolutely spend a lot of money on whatever brings you the most happiness! The end of that sentence is key: whatever brings you the most happiness. You can afford to spend more money on something, but you probably cannot afford to pick 17 areas to increase spending.
And yes, I said increase spending. In Die with Zero: Getting All You Can from Your Money, Bill Perkins outlines how to approach life to use your money to maximize your happiness during your lifetime. Ramit Sethi similarly suggests “dialing up” spending in the category that provides you the most joy in I Will Teach You to Be Rich.
This may make some FIRE (financial independence, retire early) folks uncomfortable, but eliminating joy entirely is unsustainable. Instead, enjoy the path by allocating 5-10% of your budget to something that gives you joy, and continue with a still impressive 60% savings rate instead of 70%.
Planning for the Unpredictable Moments
Funding a continuously joyful expense, like the luxury gym membership, may seem easy enough. You can find the money spent on ancillary items and repurpose it to reserve a weekly tennis court to play doubles with your friends or pay for gas and food on a monthly hiking adventure with your partner.
However, if you find happiness from the big vacation or the once-in-a-lifetime concert, planning can be a bit more difficult.
Patrick and I are both huge baseball fans. I am a Red Sox fan, and he unfortunately supports the Dodgers. We knew if they ever reached the World Series at the same time, we absolutely had to attend.
When we met, the Red Sox and Dodgers had only played each other in the World Series one time back in 1916. Then, in 2018, the Red Sox and Dodgers made it to the World Series. Patrick and I did not yet have decent salaries. The cheapest tickets were more than $600. We were a flight away. We could only attend game one due to my rugby schedule.
So, did we see Chris Sale pitch against Clayton Kershaw for the first time ever?
You bet.
How did I afford a trip to the World Series in Fenway Park when making less than $45K and living in Washington, DC? I had been saving for it since 2013 when Patrick and I decided that we had to go to the World Series if the Red Sox and Dodgers ever made it.
I have a high-yield savings account labeled “Baseball” that sits waiting for the postseason game I cannot miss. When the Red Sox struggle, it remains untouched and grows. When the memorable matchups happen, the account gets emptied, and I make memories.
Whatever event you would regret missing or opportunity you would hate to forgo is worth saving for starting now, even if it is hypothetical. Hypotheticals are difficult, but a good starting point would be to determine the shortest possible time frame in which you may want to use the money to buy happiness.
Attending that World Series game cost around $1,000 for tickets, flight, and a very small Airbnb. If $1,000 sounds like too much to drop suddenly, think of it another way: That World Series game cost $16.67/month since I decided I would attend.
Never forgetting the trajectory of Eduardo Nunez’s home run over the Green Monster from my seat in the bleachers was definitely worth $16.67/month.**
Maximizing Happiness
When you start out, you may have to choose between prioritizing the WNBA Championship or a monthly fee for pool access. Once you are maximizing your retirement contributions and are in a place where you are content with your savings and investing, you can expand to a second priority that provides you happiness, and then a third.
In Wealth is Not a Number, I discussed how wealth is a mindset rather than a quantifiable measurement. In my opinion, achieving that wealth mindset often happens when you have the ability to prioritize a continuous happiness priority, like the luxury gym membership, and an unpredictable happiness priority, like the spontaneous World Series tickets. Having that consistent joy while also being able to say yes to your most memorable priority is the most joyful freedom of all!
*For more on memory dividends and targeted spending to live a full life filled with high-quality memories, read Die with Zero: Getting All You Can from Your Money by Bill Perkins.
**I did not literally save $16.67/month for the World Series, since I hoped it would happen sooner than 2018! In reality, I saved so that I would have had the money to pay for a Red Sox vs Dodgers game a year later, but the game would have been in Los Angeles instead of Boston and required a drive instead of a flight since I was living in Las Vegas, Nevada at the time.
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