It turns out money really can buy happiness.
That is, if you spend it on the right things.
According to a recent San Francisco State University study, people mistakenly believe spending their money on material items, like a new car, is a better value than forking over cash for things that will create memories, such as a trip.
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"We naturally associate economic value with stuff. I bought this car, it's worth $8,000," says study researcher and psychology professor Ryan Howell. "We have a hard time estimating the economic value we would place on our memories."
To reach their results, researchers interviewed people before and after they made purchases. Prior to the purchase, respondents believed life experiences would make them happier, but material items would be a better use of their money.
After the purchase, however, respondents changed their tune, saying that life experiences not only made them happier but were a better way to spend their money.
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"There were just huge underestimates in how much value people expected to get from their purchase," Howell says. "It's almost like people feel they will get no economic value from their life experiences and therefore they feel this tension in spending money on them."
Howell notes that striving for happiness is not a frivolous endeavour, as it brings with it a host of other benefits.
"Companies want their employees to be happier because they are more productive. Doctors want their patients to be happier because they will be healthier," he explains. "We should try to figure out how to help people maximize their happiness."
Hmmm... sounds like an excuse to blow that tax return on a trip to the Bahamas!