How To Spend Money To Increase Your Happiness

I am in this great financial-planning book club. We read and discuss one book a year. The downside is that we have a video conference to discuss the book, instead of getting together in person, and there is no wine involved.

This year, we read and discussed "Happy Money: The Science of Smarter Spending," by Elizabeth Dunn and Michael Norton. The book reflects new research (circa 2013) on the science of spending. Who knew this was an area of research?

Dunn was a speaker at the fall 2015 National Association of Personal Financial Advisors conference. For me, reading the book gave her presentation more depth. Her insights resonated with me, and I have tried to incorporate them into client conversations.

Have you ever made a purchase and then thought it wasn't worth the money? While not every purchase will bring great happiness, Dunn defines five principles of money that will help answer, " Am I getting the biggest bang for my buck?"

• Buy experiences. An ongoing research study found there is only one category that affects happiness, and that's leisure spending. Yet the researchers found leisure spending was dwarfed by spending on housing and transportation, which turned out to have no impact on life satisfaction . Mark Twain had a great quote: " Twenty years from now, you will be more disappointed by the things you didn't do than by the ones you did do."

Make it a treat. My family loves baseball. Early in my marriage, we didn't go to many games. Every game was an adventure. Several years ago, we bought a mini season-ticket package. Going to Cincinnati to a Reds game became almost routine and took some of the fun out of it. We now split our package with friends and go to fewer games, but each game is a little more special. I think we would enjoy it more if it rained less and they won more, but a day at the park is always enjoyable.

Buy time. I have a housekeeper and someone to do my taxes, my bills are paid automatically, and I shop online whenever possible . Unfortunately, the book notes that this expansion of time is often squandered by spending more time on less pleasurable activities, such as shopping, working and commuting.

Pay now, consume later. In general, we are urged to consume now and pay later. Research has shown that putting that mindset in reverse brings more happiness. "Delaying consumption allows spenders to reap the pleasures of anticipation without the buzzkill of reality," the book notes.

Invest in others. The book notes that new research demonstrates that spending money on others provides a bigger happiness boost than spending money on yourself. How you give also affects happiness. Suggestions include making it personal, making an impact and combining it with shared effort.

According to The Slow Movement (www.slowmovement.com), "We are searching for connection. We want connection to people ourselves, our family, our community, our friends-to food to place (where we live) and to life. We want connection to all that it means to live-we want to live a connected life." Our giving should foster those connections.

The book asserts, "The principles we outlined should not be considered as independent from each other. You shouldn't either buy experiences or invest in others, but rather think about applying as many principles as you can in your daily spending. It's even possible to apply multiple principles with a single purchase."

Remember the goal is to cut down on the number, and magnitude, of purchases that we look back on as not worth the money.