The Secret to Squeezing More Happiness from Every Dollar You Spend
Before you go out and buy a snazzy new car or a 52-inch TV, read this. Research shows there may be something else to splurge on that'll make you so much happier.

As a financial planner, it’s my job to make sure my clients have a solid plan to get them from where they are to where they want to be. Often, “where they want to be” is something like “wealthy” or “financially independent” or “at my beach house that I’m going to move to after I retire early.”
These are all great goals — but for the most part, they take place at a distant point in the future. Part of my financial planning philosophy, though, is that we should be able to enjoy our lives fully along the way. We should be able to use our money (by spending reasonably) as we move from where we are to our ultimate goal. That takes balance and some self-awareness.
So, how do you use the money you can safely spend to actually get what you want, rather than just a pile of regrets and buyer’s remorse? People aren’t naturally good at extracting maximum value from every dollar spent. We tend to spend our money on things that we think will make us happy, but fail to do so.

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A Major Key to Financial Success: Knowing How to Spend for Happiness
That’s why I was fascinated by a talk given by psychology professor Dr. Elizabeth Dunn at a financial planning conference I attended recently. Dr. Dunn is the author of Happy Money: The Science of Happier Spending, and she gave a keynote talk about the fact that, scientifically speaking, you can use money to buy happiness.
I wanted to share four of my favorite takeaways from Dr. Dunn’s talk, in hopes that it will help you see some new ways to leverage your available spending money to increase your happiness:
1. Experiences > Stuff
Dr. Dunn explained that when it comes to spending regrets, we often feel buyer’s remorse when we buy stuff. Think things like new TVs, computers, clothes and shoes, home decor, cars and so on. Why? Because of two main reasons:
- Stuff is easy to compare and quantify. It’s very easy to look around at all your stuff, then survey your neighbor’s stuff — and determine who has the most or the best. If you decide your neighbor has better, newer or more stuff, it tends to decrease your own happiness. Beware of comparison traps.
- Humans are highly adaptable. Evolutionarily speaking, this can be a very positive thing. But when it comes to consumerism, it’s a recipe for disaster. We adapt easily, so what was once new and novel quickly becomes normal and routine. We need more and more stuff to get the same rush or sense of happiness that we used to get from less stuff, simply because we got used to our existing stuff.
When it comes to spending money, people tend to regret buying things because things do not make us happy. On the other hand, something interesting happens with experiences: People report more regret when they had the chance to take part in an experience and chose to skip it instead of spending the money.
The takeaway here? If you have some cash available to spend, spring for the long weekend trip with a friend or your family — not a new TV. And while you’re on that vacation and need to choose between spending money at the shops or spending money to go on an excursion or tour, pick the tour. If you choose to shop, you’re more likely to eventually regret the stuff you bought and the fact that you missed out on an additional experience.
Experiences even come with better ROI because there’s a potential for growth. “The emotional return on investment with experiences may grow over time,” Dr. Dunn explained. That’s because our brains tend to enhance those memories over time, which in turn give us increasing pleasure and satisfaction from a single experience.
2. Research Shows Homeowners Are No Happier Than Renters
This was an interesting tidbit from the talk that struck me, because whether I’m working with a 30-something client or a couple in their mid-50s preparing for retirement, the subject of buying a home comes up all the time. People are often convinced buying a home is a must-do, but it’s not always the smart choice from a financial or lifestyle perspective.
For younger clients, they may be looking at buying their first homes — and feeling like they have to buy. They feel a lot of pressure from family, friends and society; they assume a home is just a foregone conclusion because it’s what everyone else does.
For couples getting ready to retire, they might be considering downsizing to a different home or moving back into the city from the suburbs because their kids are off to college. Their first assumption tends to be, “I should buy the condo.” They don’t often think, “maybe I could rent the condo.”
In both cases, I usually encourage my clients near retirement to consider renting for many reasons. The idea that buying is always better is a complete myth. I’ve chosen to rent, because I live in downtown Boston and renting works out to be a better financial proposition in the current market — and, even without taking the numbers into account, it’s simply a better lifestyle decision for me.
All this being said, it was interesting to hear Dr. Dunn share research that showed buying a house doesn’t automatically make you happier. Homeowners and renters tend to be on a par with each other in terms of happiness. Yet so many people argue for homeownership based on the idea that it will provide a better, happier life. It’s simply not true!
That doesn’t mean you should feel bad if you’re already a homeowner. Nor does it mean you shouldn’t buy, ever. The point is that thinking you will be happier just because you own a home is bad reasoning. If you think you want to buy a home because it will somehow improve your life in a way that renting can’t, know that it probably won’t. You need more reasons than just “it will make me happier” if you want to part with large sums of cash in exchange for a mortgage and a property to maintain.
3. When You Do Buy Stuff, Stick with Base Models
Let’s say you act on the takeaways above: You spend less on stuff and you rent instead of buy — which frees up a lot of cash flow since you don’t have to spend on home maintenance or repairs each year. If you get into the habit of spending less on stuff while also creating more available money to spend, that might make you apt to spend more on the nicest possible things when you do make a purchase.
But that could be a mistake. When it comes to what you use every day, like your car, luxury items don’t bring any more happiness or satisfaction than standard options. That’s because we stop noticing them over time since they become just another part of our routine.
If you do want to splurge on a material item, consider doing it on something that you won’t use every single day. That will help the item retain its sense of novelty and excitement, because it won’t fade into the background of your normal life as just another utility.
4. Pause and Express Gratitude
At this point, we know humans suffer from “hedonistic adaptation,” which means what was once new and novel for us quickly becomes normal — and we need more and more new and novel things to get the same thrill. That’s not just bad news for trying to buy material things to create happiness.
“Abundance is the enemy of appreciation. The more you have, the less likely you are to express gratitude,” warns Dr. Dunn. Not only do we get used to new things, then, but we also set ourselves up for a weird kind of failure: The more successful we are (if measured by our wealth and possessions), the less apparent that success becomes.
Practicing gratitude is a simple way to feel happier about the abundance you have in your life, rather than letting the good stuff slip out of focus and into the realm of being taken for granted.
With these takeaways from Dr. Dunn’s talk in mind, you’re well positioned to understand a fundamental financial truth that some of the happiest people among us already understand: Money is a tool, and we can use it to build some amazing things in our lives. We just need to learn how to apply it well and leverage it strategically.
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Eric Roberge, CFP®, is the founder of Beyond Your Hammock, a financial planning firm working in Boston, Massachusetts and virtually across the country. BYH specializes in helping professionals in their 30s and 40s use their money as a tool to enjoy life today while planning responsibly for tomorrow.
Eric has been named one of Investopedia's Top 100 most influential financial advisers since 2017 and is a member of Investment News' 40 Under 40 class of 2016 and Think Advisor's Luminaries class of 2021.
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