Can Money Buy Happiness? How to Measure Your Joy

Can money buy happiness? Psychologists have been investigating this question for decades. Are we happier when we earn and spend more? What do you think?

I think we can let researchers continue to run their surveys and experiments. In the meantime, we can use a spreadsheet full of emoticons to decide for ourselves.

Tracking our Expenses

Every financial guru under the sun recommends tracking your expenses. It’s an easy way to get a handle on extraneous spending.

In a perfect world you review your purchases and realize you don’t need a lot of the things you pay for. Then you cut those expenses. You cancel your cable bill, reduce the number of times you go out to eat, etc.

On paper, our financial transactions appear as nothing more than a series of dollar signs, digits, and commas. The numbers sit quietly, almost politely, in their perfectly aligned columns and rows. If you’ve ever tracked your expenses you know how bland those spreadsheets can be.

I believe in the power of tracking expenses. Every month I boot up Excel, pull out a large sheet of paper, or grab myself an old fashioned ledger. Then I begin writing down the items and experiences I’ve spent money on.

As I look through our bills I categorize each purchase. Then I painstakingly account for each penny.

  • Electric bill… Utilities.
  • Grocery store… Food.
  • Movie tickets… Entertainment.

The process seems so dull and boring. When I finish I sit back and sigh. I either feel good about those numbers or frustrated by them, but what did I learn by writing them down?

Some people will change their spending habits based on the numbers they see. Others will continue on their merry path. Those folks will spend the same way they did before they reviewed any of their information.

The Relationship Between Money and Emotions

What does any of this have to do with happiness? Are we going to answer the question: Can money buy happiness? Yes, bear with me.

Stress, anger, jealousy, fear, boredom, and sadness all push us to spend. There’s a term for this behavior. It’s called, “emotional spending,” and whether we like or not, emotions impact our purchases.

I am fascinated by the relationship between money and emotions. Unfortunately, by the time we review our finances, we tend to forget about the emotions involved in each sale. We type numbers into our ledgers, but ignore the feelings that caused us to buy something in the first place.

Taking the emotional influence out of numbers does us a great disservice. How do I know? I’ve been tracking how these emotions impact my spending and my happiness.

Documenting My Emotional State

A year ago I created two new columns beside each expense in my spreadsheet. I labeled the first column: ’emotion’.

The data in this column represents the way I feel before I buy something new. Was I angry or bored? Did I feel excited or sad? As I write down the expense I try my best to remember how I felt about it.

Of course, this doesn’t apply to everyday bills. Who is happy to pay their electric bill or property taxes? I don’t track that. This data is reserved for extra expenses. The stuff I didn’t need to buy.

I fill my spreadsheet with emoticons and emojis. Imagine looking at a grinning face in one row and a red angry face in another. Date night gets a smiling face with hearts. A woozy face appears next to the nachos we ordered after a long night at the bar.

My spreadsheet doesn’t look quite so boring anymore.

A Joy Based Ledger

Why did I decide to document my emotional state? What information could that possibly provide?

Well, remember how I told you I added two columns to my spreadsheet? The first column is “emotion”. The second column is “joy”.

Each time I track my expenses I correlate my happiness with my spending. I attempt to measure the return on joy I feel every time I part with my money.

Measure the return on joy? It might sound strange, but we often use money to buy ourselves a little happiness.

How do you spend your excess cash if you have any? What will you buy after you’ve paid for your rent, food and utilities?

Most of us use money to buy happiness, but are we happier with the items we buy? Can money buy happiness?

Measuring the Return on Joy

It’s difficult to measure the return on joy. Right after you buy something you might feel downright elated, but over time that joy begins to fade.

It’s almost impossible to determine the level of joy you feel right after an experience. A new car might feel great when you drive it off the lot, but a year later it might not feel so special.

It depends on what type of car you bought and where you are going. Can you roll down the top and feel the breeze in your hair or are you stuck on the freeway in stop-and-go traffic?

For this reason, I wait six months before reflecting on my purchases. By then hedonic adaptation often takes over. The things I once loved I don’t love anymore. The opposite is also true.

Many years ago I traveled to Spain with a good friend from college. It was a frustrating experience. I was sick before we boarded the plane. During the trip, my friend caught my cold.

It rained more than half of our vacation. We didn’t feel well so we didn’t explore the Spanish cuisine. Instead, we ate peanut butter crackers we’d packed in our luggage.

When we arrived home that trip seemed downright awful. Now, the unpleasant memories have faded into the background of my memory. The endearing, funny moments have replaced them.

Every few months I leaf through my expenses to document or change my joy ratings.

Can Money Buy Happiness?

What have I discovered from this little experiment? This little spreadsheet of mine provides all kinds of insight. When I buy in a negative emotional state I tend to regret my purchases.

Did I ever feel happier when I spent money in a less-than-optimal state of mind? Maybe for a day or week, but never for an extended period.

This brings us back to the question at hand. Can money buy happiness? In my personal experience money never buys happiness if I’m not already feeling positive. However, whenever I’m in the right state of mind money does buy happiness.

My relationship with money may not be the same as yours. That’s why I think everyone should try this little experiment for themselves.

Why Does Joy Matter?

Why does it matter if our purchases bring us joy? What is the point in documenting it?

My spreadsheet provides a snapshot of my emotional spending. It’s convinced me to avoid shopping if I’m feeling bored, angry, tired, or sad.

Maybe you already know this. Perhaps deep down you know that you shouldn’t go shopping in these emotional states. I felt the same way, but seeing those numbers provided me with the extra proof I needed.

Looking at that spreadsheet makes it easier not to buy things if I’m not in the proper frame of mind.

Lifelong Lessons

How often do you buy something believing that it will make you happy only to find out that it didn’t make you happy at all?

In the beginning, I was inherently bad at predicting my happiness. Thanks to my spreadsheet I have gotten much better over time.

I used to think fancy gadgets, pretty clothes, and a nice car would make me immensely happy. It turns out they don’t provide lasting satisfaction.

Objects rarely bring me lasting joy.

How to Buy Happiness

My rows of smiling emojis correlate to an array of experiences. The simple pleasures in life receive the highest marks; bowling, dining out with my husband (pre-COVID), and inviting friends over for pizza.

Interestingly, it’s not the giant trips to fabulous, far-off locations that provide the biggest bang for their buck. Some of my favorite experiences have happened in our house or right in our backyard.

I’m also happy to pay someone to perform chores I don’t really want to do. Sure I could paint my own walls, but I can’t do it as well as a professional painter.

Staring at the perfect line that separates my blue wall from my bright white ceiling makes me incredibly happy.

Spending money on home renovations is one of the best things we’ve ever done. I love the color of our walls, the expansive basement we created, and the wide kitchen we love to cook in. As a result of those renovations, we turned our house into a home.

In my younger years, I thought paying for renovations was a waste of money. It looked good enough, I thought. I was proud of my frugality. I’m glad we didn’t put money into our home when we were younger, but now things are different.

Becoming a stay-at-home parent increased the amount of time I spend here and I’m glad we renovated.

Money Does Buy Happiness

Why does joy matter? Many so-called personal finance experts are quick to shame consumers’ spending habits. Lattes and avocado toast top that list. “To be rich,” they say, “you shouldn’t buy x, y, or z.”

But what if those items bring us great joy? What if we cut out other expenses so we can relish in that perfect cup of coffee or piece of avocado toast?

What if we meditate while sipping that first cup in the morning? Does it make a difference if we eat that toast while laughing with long time friends?

I don’t think it’s fair to rule out certain purchases. It’s certainly not fair to shame others who want to buy them.

A joy based approach to personal finance forces us to live intentionally. We can still buy the items we want, but first, we must ask ourselves whether they bring us joy.

If they don’t bring us joy, and they aren’t a necessity, then why are we buying them?

Does Money Buy Happiness?

We don’t just buy whatever we want whenever we want it. Instead, we ask ourselves, “Will this provide lasting happiness?”

We must set aside money for savings and retirement, but each of us will still splurge from time to time. What are we buying with our money?

Are those purchases making us happy? Can money buy happiness? To find out you have to ask yourself, “What will bring me joy?”

10 thoughts on “Can Money Buy Happiness? How to Measure Your Joy”

    • Let me know if you try it. I’d love to know if it starts to change your spending habits. I find myself asking, “Will this make me happy?” before I buy something. If it doesn’t then it doesn’t go into the cart.

  1. Oops I tried to edit my comment and it didn’t work. It originally said that having my house cleaned (not by me) is my favorite luxury!

    I’m trying your expense method for August. I’ll let you know how it goes

  2. Would love to see a picture of your spreadsheet in this article, it would help make it real. Change the numbers or categories if you don’t want to reveal personal details, but seeing what you describe would add a lot!

    “I fill my spreadsheet with emoticons. Imagine looking at a grinning face in one row and a red angry face in another. Date night gets a smiling face with hearts. A woozy face appears next to the nachos we ordered after a long night at the bar.

    My spreadsheet doesn’t look quite so boring anymore.”

    • When you know what makes you happy you can trim the non-joyful expenses without feeling much impact and keep the stuff that brings you joy!

  3. I realize some people love number and spreadsheets. Me not so much. I don’t budget and I only slightly keep track of expenses. Yet I still manage to live below my means; family upbringing I guess. I have purchased things that I regretted, that initially made me happy but that faded, that I still enjoy, that I have fond memories of. Can money buy happiness? Absolutely if you use it the right way. It is merely a tool. I once had a Saturn Ion that I loved for 11 years. I still have fond memories of that car. I once received an unexpected inheritance from an aunt (double happy). Not a ton of money but a lot for me. This afforded me the opportunity to quit a job I hated. I still haven’t spent a dime of it. Just having it in my emergency fund has relieved a ton of stress. What is important is having the right attitude/gratitude.

    • That’s so well said Suzie. Our attitudes have such a big impact on our finances and our lives in general. It’s also important to note that what makes one person happy might not make another person feel any joy at all. That’s why it’s so important to know yourself. You don’t need to keep spreadsheets to learn this. There are many ways to keep track of the things that bring happiness in to your world. Thank you for the comment.


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