Science-Backed Ways to Spend Money for Greater Happiness

Ten years ago, I stumbled upon minimalism. Embracing a lifestyle centered around owning fewer things has transformed my life in numerous ways. Unsurprisingly, one of the most significant changes has been my perspective on spending money. Releasing ourselves from the burden of excess belongings allows us to seek joy in areas where it truly exists. Even for those who may not fully adopt a minimalist approach, there are valuable insights available that can help us make wiser spending choices.

For those seeking more happiness in life, research suggests that once our basic needs are met, it’s not necessarily about how much money we have, but how we choose to spend it. Years of psychological studies indicate that certain types of purchases can significantly enhance our well-being, and these benefits can last long after the money is spent. Here are three science-backed ways to use money that may boost happiness and enrich our lives.

1. Spend on Experiences, Not Things

One of the most significant findings in happiness research is that spending on experiences, rather than material items, brings greater joy. While this might seem intuitive, the science provides compelling evidence. Amit Kumar, a professor at the University of Texas, notes, “People derive more happiness from their experiences than from their possessions.” His research shows that people who invest in experiences—whether a vacation, a concert, or a family outing—tend to feel happier before, during, and even long after the experience. These memories stay with us and become part of our identity, offering a longer-lasting sense of joy than physical items, which often lose their appeal over time.

The happiness gained from experiences is also amplified when shared with others. Robert Waldinger, the director of Harvard’s 75-year-long study on adult development, explains that shared experiences foster a sense of connection and well-being. Investing in experiences can serve a dual purpose: it brings personal joy while also strengthening relationships. Personally, since shifting to a minimalist lifestyle, I focus more on building memories rather than acquiring new gadgets or trends. The value I place on family outings, trips with friends, or even a simple dinner at home has grown, and I’ve found these memories to be far more fulfilling than any item could be. Now that my children are becoming young adults and leaving home, I’m even more grateful for the memories we created together.

2. Give to Others

Another happiness-boosting way to spend money is by giving it to others. Numerous studies confirm that spending on others brings more joy than spending on oneself. A study published in The Journal of Personality and Social Psychology supports this idea, stating, “Spending money on others promotes happiness.” This effect appears to hold true across different cultures, income levels, and ages, highlighting the universal appeal of generosity.

Giving aligns with our innate need for purpose and connection, which is likely why it boosts happiness. When we use our resources to make a positive impact—whether through charitable donations, thoughtful gifts, or acts of kindness—we feel a stronger sense of purpose. This “prosocial spending” can take many forms, from large donations to a local nonprofit to something as simple as treating a friend to lunch. The act of giving doesn’t need to be extravagant; even small gestures can lead to happiness. I’ve personally felt the benefits of giving, from donating to causes I care about to buying a meal for someone in need. Each act, regardless of its size, reinforces a feeling of connection to my community and a sense of purpose.

Additionally, giving is beneficial for our mental health because it aligns our spending with our values. When we use money in a way that reflects our deepest desires to help others, we not only create joy for those around us but also experience a sense of fulfillment. This alignment between our financial choices and our core beliefs is essential for long-lasting happiness.

3. Buy Time to Reduce Stress

Another powerful way to use money for happiness is to “buy time.” Studies have shown that spending on experiences can increase joy, but buying time by eliminating stressors is another effective approach. A study published in The National Library of Medicine Journal found that people who prioritize time over money generally report higher life satisfaction. According to the study, “Using money to buy time can protect people from the detrimental effects of time pressure on life satisfaction.”

Buying time can take many forms, from hiring someone to handle time-consuming tasks to making lifestyle changes that reduce time-related stress. For example, people who hire help for household chores, choose a home closer to their workplace, or even pay for a grocery delivery service often find they have more time for the things they love. These seemingly small choices can create more opportunities for family, hobbies, or relaxation, which ultimately contribute to a greater sense of well-being.

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This approach isn’t about avoiding work or shirking responsibilities; it’s about managing our resources to focus on what matters most. By outsourcing certain tasks, like cleaning or yard work, we free up time to spend on meaningful pursuits. As a result, our days feel less burdened by stress, allowing for moments of enjoyment and connection with others. When I started implementing this approach in my own life, I found I had more energy for the activities that genuinely brought me happiness, like spending time with loved ones or pursuing creative hobbies. Small choices, such as paying for meal prep services or hiring someone to help with household chores, can make a significant difference in reducing stress.

Spending Intentionally for Lasting Happiness

Spending intentionally is a choice we all have, and science tells us that the greatest happiness isn’t found in acquiring more possessions but in how we use our resources to enhance our lives and relationships. By choosing to invest in experiences, giving to others, and freeing up time for things that truly matter, we can find joy that is deeper and longer-lasting than anything a new purchase could provide.

These choices allow us to direct our financial resources toward what makes life meaningful. After our basic needs are met, it’s about enriching our lives and creating memories rather than accumulating more things. Science shows that happiness can be cultivated by spending on experiences, aligning our spending with our values, and removing daily stressors. By following these research-backed methods, we not only improve our own well-being but often bring joy and connection to those around us.