You might be tempted to throw up your hands in exasperation at these findings. It’s easy to be discouraged by the fact that we are driven instinctively toward a goal that doesn’t actually satisfy us.
Luckily, there is a loophole. Research shows that how the wealthier among us spend their money makes all the difference for their well-being. Specifically, spending money to have experiences, buying time, and giving money away to help others all reliably raise happiness. Thus, if you have a little excess income, it’s best to use it on those three things.
The key factor connecting all those approaches is other people. If you buy an experience, whether it be a vacation or just a dinner out, you can raise your happiness if you share it with someone you love. Friends and family are two key ingredients in well-being, and fun experiences with these people give us sweet memories we can enjoy for the rest of our lives—unlike the designer shoes that will wear out or go out of style.
Likewise, if you pay someone to do something time-consuming that you don’t like to do (for example, cutting your yard), and don’t waste the time you gain on unpleasant things like doom-scrolling on social media, you can get a happiness boost by spending those extra hours with others. As an added bonus, you might be able to convert your excess capital into earned income for someone who is still climbing the well-being curve.
And if you use your money to charitably support a person or a worthy cause, your brain will respond with boosts in dopamine, serotonin, and oxytocin, elevating your mood. Charitable giving is also linked to higher earning, which you can then spend on relationships, experiences, and charity.
Left to our urges and natural desires, we can get stuck in a cycle of dissatisfaction, in which we work, earn, buy, and hope to finally get happier. But we don’t have to play that futile game. Anyone who acquires money can use it to buy some happiness, and do a little self-improvement in the process. If we don’t have much, we can spend any extra cash on removing some of the stressors in our daily lives. When we have enough to meet our basic needs, we can fight our materialistic impulses and spend time enjoying the people around us. And if we are lucky enough to have extra income, we can make it into a source of happiness, by transforming it into a means to share, and to love others better.