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8 Proven Purchases For Happiness

By Frugaling 8 Comments

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The Wolf Of Wall Street Movie Film

Happiness = Money, right?

Research suggests that happiness and money are poorly correlated. In other words, money doesn’t tend to make people happy. Pretty crazy, right? Everything about our society seems to be predicated around the synergy of these two variables. But most of the time, happiness is correlated to other behaviors (i.e., closeness to friends, enjoyment at work, and balance in life).

In this consumer-driven society, encouraged to buy from our very own presidents and leadership, we are primed and ready to spend and spend – well beyond our budgetary restrictions. Our world tends to eschew philosophical questions about why you need to have something, in favor of taking advantage of the present moment to spend.

Happiness is often a marketing tool, used to increase sales. For instance, a commercial may feature scantily-clad women partying with beers in hand. It doesn’t take a scientist to decipher the claim: drink more beer, get more women – prettier ones, too! But lasting happiness isn’t at the end of a bottle.

You’re Doing It Wrong

Wolf Of Wall Street Leonardo DiCaprioIn Martin Scorsese’s The Wolf of Wall Street, Jordan Belfort wreaks havoc on financial markets, his family, and to anyone else in his way. He has a ruthless charm, narcissism, and greed. He spends and drives recklessly. Jordan is the living embodiment of a metastasized compulsion to capitalism.

What our antagonist fails to understand is that happiness, purpose, and meaning are not contained within another $100 bill (or, however many millions he makes). Who can blame him, though? When a society values money like we do, and encourages spending without regard for the future, he’s actually playing by our rules.

Moreover, he’s not alone. Many struggle to understand and say “no” to a society that propagates this need to spend and make more money. But what if money did actually make you happy? What if there was a way to make these two things more correlated?

An Action-Plan For Money And Happiness

Newer research suggests that money can make you happy, but up until now we’ve been spending it wrong. All the beer, fast cars, and yachts can’t make us happy. Instead, happiness comes from some specific action-oriented spending.

  1. Take the trip, ditch the tchotchkes
    When it comes to happiness, buying material goods rarely suffices. Whatever positive emotions are initially experienced tend to fade rapidly over time. In fact, 57% of people reported greater happiness from experiential purchases versus 34% for those purchasing material goods.
  2. Give a little, give a lot – just give
    Researchers found that personal spending – buying for yourself – did not relate to long-term happiness. On the other hand, those who spent money on others acknowledged greater happiness. When you think about all of your expenses for a month, it might help to think about how much of that is going to help others.
  3. The tiny purchases are more important
    Unlike Jordan Belfort and his bags of cash, you’ll likely be restricted by current bank account balances. When you purchase expensive, rare items, there’s a finality and adjustment that occurs – a new norm develops. If you buy smaller, more frequent items, you actually can take advantage of novelty and variability – both key health indicators.
  4. Avoid extended warranties and overpriced insurance
    Turns out that there’s quite a lot of psychological evidence to suggest that buying extended warranties may be an unnecessary “emotional protection.” Essentially, because we do not want to lose/damage our new purchase, these warranties pull out an emotional response regarding loss. Most of the time, buying or reacting to this makes you spend more than you have to and occludes happiness.
  5. Delay gratification, consumption
    Researchers suggest that “anticipation” is a key ingredient to a healthy, happy purchase. By waiting to purchase and letting that eagerness build, we may actually enjoy it more when we finally have it. Likewise, by delaying purchases, consumers may spend less – or not at all.
  6. Clear pros and cons
    Looking to buy that dream home someday? Where do you envision it? Maybe you want to buy a dream lakehouse? Researchers found that many people tend to downplay the negatives of an imagined purchase. What about the tax implications, a plumbing issue while you’re away, and/or an exceptionally mosquito-filled summer? Imagined happiness is often easier than the reality of an impending purchase. By trying to realistically imagine your purchase, while creating an objective, logical pro and con list, you may be able to avoid this pitfall.
  7. Don’t dare compare
    We’re notoriously awful comparison shoppers/buyers; at least, when we account for happiness. Dunn, Gilbert, and Wilson (2011) found that Harvard University students living in their residential system tended to downplay social ties and try to pick physical features of a building first.

    …when these students later settled into their houses as sophomores and juniors, their happiness was predicted by the quality of social features but not by the quality of physical features in the houses.

    The point is that even though the social features matter far more, before we choose something, we don’t always process and think about our own social needs. Interpersonal connections with others are necessary for most everyone, and they tend to bring greater happiness.

  8. Think of others’ enjoyment, too
    Online review sites and movie rankings bring swaths of people to rate their own experience with a product or experience. By utilizing these websites, you can measure your own enjoyment and future experience to theirs. If lots of people experienced happiness, odds are you will, too!

This action plan for making happiness from money is based off the research by Dunn, Gilbert, & Wilson (2011). They found that people were spending their money inappropriately, thinking they’d be happy, when there were better ways.

How do you spend your money? What do you do to find long-term happiness?

Filed Under: Make Money Tagged With: Budget, cash, Consumer, Happiness, Life, Make Money, money, research, science, spending, wolf of wall street

Your Obligations May Actually Be Choices

By Frugaling 2 Comments

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Wedding obligations bride costs money choice
Here comes the bride… And the obligations.

This is a guest article from Stefanie! She’s trying to find ways to stretch her budget in one of the most expensive cities out there, New York City. A graduate of New York University’s drama and psychology programs at the height of the financial crisis, Stefanie discovered the world of financial planning out of necessity. Thanks for sharing your insight!

Almost everything you spend money on is by choice. Yes, you have needs, but you choose those needs. Yes, there are expectations, but you choose which expectations you care to meet.

With the exception of taxes (and health insurance), you don’t have to spend money on anything. Yet, people say it all the time, “…but I have to buy…” But no one is forcing you to buy something. See, you have to recognize that you are the one choosing your spending priorities.

I hear a lot of the “I have to” justification of spending when it comes to social, cultural, and familial obligations. These obligations are typically a duty or commitment to which you feel bound, not something to which you are bound. This is an important distinction.

I know that my personal feelings of obligation and commitment fall on a spectrum. For instance, when invited to a friend’s birthday party, I don’t feel that I really have to attend, but it would be nice. With a wedding, I’ll start to feel more of that sense of obligation. The sliding spectrum continues, and if it’s my sister’s wedding, I feel completely tied, obliged to the occasion. But no matter how I feel about those events, I can’t unquestioningly commit to attending until I’ve assessed the monetary reality.

Let’s say my best friend asked me to be a bridesmaid. I would feel a strong sense of commitment, but not be able to accept until I understood the full financial implications. Would I be expected to purchase a dress? Accessories? Attend other bridal events? What would be the total cost? Now, if I were to assume an average, which according to weddingchannel.com is $1,695 to be a bridesmaid, I would have to decline regardless of my sense of obligation. Unfortunately, that’s a choice many people fail to see, and it impacts their future financial success. Their sense of obligation overtakes everything else. If you can afford it, fantastic! If you can’t, that could be downright dangerous.

The environment, society, and larger culture that you are a part of may harbor even stronger expectations. I’m going to continue to use the wedding industry as an example. It’s a relatable illustration of how we allow the sense of obligation to justify extraordinary overspending.

If I ever get married, there’d be a host of expectations surrounding the big day; especially, as I am part of a strong cultural group with deep rooted traditions. But as strongly as I, my parents, friends, and community feel about those things, the thought of spending $28,400 (the cost of the average wedding in 2013) on one day feels exceptionally wasteful. The funny thing is, a lot of people would agree that the number seems insane, but when they get down to the actual planning and fulfilling the requests of mom, dad, grandma, the girlfriends, the church, etc., suddenly the spending seems justified. Meeting expectations of others, regardless of how impractical, overtakes sound financial decisions.

My challenge to everyone, and to myself, is to never use the phrase “I have to” when it comes to spending my money. At times, I may feel a strong sense of commitment to myself and others – feeling obligated, but at the end of the day, the things I spend on are my choice. If we all accept that truth, perhaps we’ll all be a bit wiser about weighing our financial reality against our sense of obligation in the future.

Have you ever felt obligated to participate (a potluck, wedding, etc.)? How have you dealt with it? When do you feel you can choose something?

Filed Under: Save Money Tagged With: bridesmaid, Budget, Costs, expectations, marriage, money, obligations, self, spending, wed, wedding

The Purchase Paradox: Wanting, Until You Own It

By Frugaling 6 Comments

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Audi Luxury Car Vehicle Purchase Paradox
This is the purchase paradox and a nice, new Audi. Photo: NRMA/flickr

Despite aspiring to a new, more frugal life since May, I was looking at used car prices for newer models. Nothing is wrong with my older Honda Civic, but something was stirring inside me; at times, an inescapable and indescribable animalistic desire for more (even if I cannot afford it).

Something shook me from my ogling – a realization. We want what we cannot have. When we have what we desired, we no longer crave it. This phenomenon is the purchase paradox.

Purchase Paradox Oscar Wilde QuoteIt’s in the perpetual want and desire that we maintain our spending – a hamster wheel that is hard to depart. I could simply blame advertisers for causing and creating this false demand. I could point out how our capitalistic system encourages it. But there’s a fundamental human need to perpetuate this paradox.

Seemingly, it is nature to crave what we cannot have and lose attraction to that which becomes ours. We buy a fashionable coat, thinking it’s needed, craved, and desired. Purchased, owned, held, and it’s merely another accoutrement filling your burgeoning closet with stuff. The superfluous is only found after it’s written, purchased, and owned.

We adjust to a lifestyle. Buy the luxuries, feel the thrills, but eventually it fades. Objects cannot be more than fascination for long. They melt and meld into our identities and lives – defining a new normal and looking for the next fix. Bigger, better, fuller, fancier – the search continues.

Flirting with temptation and desire can motivate poor decisions and spending, but it fuels us – fundamentally. I cannot escape my desires every time, but I learn from each. We are walking paradoxes, spending like there’s no tomorrow, while recognizing that our days are numbered.

Filed Under: Social Justice Tagged With: audi, buying, Clothing, desire, fashion, Lifestyle, mindful, need, oscar wilde, paradox, purchase, spending

Need For Spend: The Secret To Stop Shopping

By Frugaling 2 Comments

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Need For Spend: The Secret To Stop Shopping. Research suggests that the longer you spend in a store, the more you spend.

Born, Bred to Buy

My grandmothers read continuously. One purchased books and the other went to public libraries. I have fond memories walking to the public library with that grandmother. Entering the large buildings of books, magazines, and computers made it fun. I would scour the shelves for new reads and sometimes checkout books I could never finish. I brought my nose to the pages and smelled the well-read scent. I loved that it only required a library card.

As I grew older, that lust for the library vanished. The plastic wrapped books felt lesser than. I wanted my own books. I wanted to feel crisp bindings and stock a shelf full of my own books. To hold, cherish, and covet my collection was important. The bound pages were a representation of me – an identity. My bookshelf consistently grew year after year, causing the slat to become concave under the pressure. 

The books followed my every move. I packed a couple big boxes each time, until I purchased a Kindle. The lightweight, 30-day-battery device was this terrific space saver. When I moved to the Midwest last year, I had 5 books and hundreds on my Kindle. Suddenly, I was free from the physical clutter, but still buying new Kindle-version books for about $9.99 a piece.

This was just one of my many spending problems. Put me in a mall – before I was frugal – and I had to spend my money on something. I felt an undeniable energy from start to charge.

The Shopper’s High

Malls glisten with an unnaturally bright sheen and stage-like lights that beat down on its entrants. Shopping centers catalyze a rush of heightened smiles and joy – its a kind of high. These bastions for consumerism test the very foundations of frugality.

Research suggests that the longer you spend in a store, the more you spend. Places like Barnes & Noble play comfortable background music, keep a temperate climate, and often have Starbucks coffee shops in tow. The aura suggests escaping from the world while you find the perfect book. You can finally find peace and happiness in purchase.

Marketers prey off of three psychological emotions: sex, fear, and happiness. Consumer research and psychological studies continually show that advertising that amalgamates these factors, wins.

Apple’s store openings are filled with a rousing cheer from an audience of employees. Attendees (shoppers) raise their newly-purchased electronics like Rafiki held Simba. Jubilance. This is where you’re supposed to have fun. And an ingenious staff bolsters the moral of many who outspend their budgets and follow into income/debt traps.

With friends like these, my purchases always felt justified, necessary, and right. Thankfully, I’m living and spending differently now. Every now and then I experience an undeniable urge to spend, and that’s when I try to mimic the shopper’s high for free.

The Secret to Stop Shopping: Your Local Library

I frequently purchased new clothing at name-brand retailers, electronics, and new books for my Kindle. These were black eyes to my budget. This continued until I found elation at the public library. It solved my urge to shop for clothing, electronics, and new books.

No longer do I need to own books and buoy the local Express retailer; although, I still have cravings to spend money on things I really don’t need. The trick to controlling spending is realizing the power of your public resources.

Here are the 5 secrets to stop shopping:

1. Customer Service

Shopping genuinely gives consumers a short-term high. When you’re in a crummy mood, it can fill that gap, temporarily. An outlet that can fill both the good and bad times is necessary to frivolous, discretionary spending.

The high is natural. It’s often influenced by strong, friendly customer service. A representative that is attentive, kind, and helps without reservations makes you feel special. That smile they offer you when you walk in the door is potent. The amalgamation of positivity is all designed for your comfort.

Libraries are a comparable outlet for the need for spend. Librarians are the attentive, customer service counterpart. They can guide and help with research. Their task is to help customers find, access, learn, and check-out. That dedication is important to feeling good about your experience.

2. New Release Rack

What could possibly replace Redbox and Amazon for movies and books? These companies have a focus on new releases and special offerings.

There’ also a diversity at your public library. If they don’t have it, they can usually order it from a partnered source. This can be a powerful tool when researching or just looking for a popular DVD. Each year, libraries cycle through new and old books. Tax contributions allow libraries to purchase new books with surprising regularity.

3. Digital Services

iTunes, Amazon, and various digital stores offer millions of books, music, and magazine subscriptions. They’re advertised heavily and are gotos in their respective domains. But, libraries have actually been in the business longer.

Looking for audiobooks, music, software, and eBooks? Your library may have everything on your list already; if they don’t, request it. Intricate networks and databases greatly expand the reach and can provide you with hidden gems of opportunities.

Over the years, libraries have changed immensely to meet evolving technological demands. Libraries contain books, magazines, DVDs, and powerful community resources. And nowadays, they also have eBook libraries for Kindles and Nooks. Free rental books can be wirelessly delivered to your favorite reading device.

Want to put your hands on the latest technology? Tablets and computers are popular accoutrement to any good library. Now you can browse, write, and learn in style. On top of everything else, you can also rely on the library for free Wi-Fi. Maybe you can even stop paying for Internet at home!

4. Extracurricular Activities

Even if your search takes you beyond the library’s walls and academic world, it can be a great, frugal-living resource.

Ready to check out some local attractions? Public libraries often provide access to day-passes to aquariums, parks, and museums. By checking out a pass, you can save $20-30 – sometimes more – every time you visit.

Legal troubles taking a bite out of your budget? Oftentimes, you can find legal and federal forms – free of charge – at your library. With the helpful assistance of desk staff and librarians, you might even understand your taxes this year!

5. Peace And Quiet

People pay good money to find sanctuaries around the globe. The irony is that they can be found at a local library. There’s no expectation to spend money, plenty of room to spread out, and the quiet will make you far more efficient (contrary to the popular desire for coffee shop din).

These are hubs and havens for saving. Use the resource, get rewarded, and join the new library movement.

What other places can you go to replace the need for spend?

Filed Under: Save Money Tagged With: buy, Library, Netflix, Redbox, Shop, Shopping, spending

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