Can money actually buy happiness?

Speaker 1 (00:01):

Okay. I am recording, and I'm going to go on mute. And good luck, guys.

Brian Ford (00:19):

Welcome to Money and Mindset with Bright and Brian, where we combine financial advice and positive psychology to help you find joy in managing your finances. In each episode, we share practical advice for managing both your money and your outlook. I'm Brian Ford. I specialize in financial wellness. And I'm here with positive psychology rock star, Bright Dickson. Today on the podcast, we're going to tackle the question of can money actually buy you happiness. We'll get into what the science has to say about money and our wellbeing, and then leave you with a few good tips on using your money to create a happier life. Sound good, Bright?

Bright Dickson (00:56):

Absolutely.

Brian Ford (01:00):

Woo-hoo. I'm still on here. Okay. So I'll let you know, Bright. I am pumped about today's topic. Let me see if I can set the stage for our discussion. Some of us grow up hearing the old adage that money can't buy you happiness. Yet, I think instinctively, we know that money does matter, but to what degree? I remember one of my kids telling me, he was like, "Dad, I know money can't buy me happiness, but money can buy me ice cream, and ice cream makes me happy." It's like exactly what he said. So what I want to do and what I think we're going to dive into today is let's look at the science, because several years back, there was a study that looked at the correlation between income and our happiness. And sure enough, there was a correlation. As our income went up, so did our level of happiness. But at a certain income, the researchers found that the happiness curve flattens out. And I don't know, Bright, if you remember looking into this study. Do you remember kind of where that income level was?

Bright Dickson (02:12):

It averaged about $75,000, but that also varies based on your location and cost of living and that kind of thing.

Brian Ford (02:20):

Yep. That's exactly right. The original study said 75,000 a year. And then a few years later, a new study came out that pointed more towards 90,000, but we know that's just an average. But the point is that after your needs are met, along with a little more to spare, income has little bearing on our happiness. So Bright, just kicking things off, I'm interested to get your initial thoughts on this, this correlation between income and happiness only to a point. What do you think?

Bright Dickson (02:47):

Yeah, I think it's interesting, because I agree that most of us sort of have this unofficial belief in our heads that more money equals more happiness. And we know that to not be true, I think anecdotally, but also from the research. And at the same time, your son is right, right? It's not having money that creates happiness. It's sort of how we use that money based on what's most important to us.

Brian Ford (03:19):

Yes. I think a couple of points come out for me. One is if our income is less than 90,000, then working to increase it actually can help. I find that fascinating. We might as well just call it what it is. The research says that's what it is. But if your income is higher than let's just say right around 90K and you think that raising it will bring you greater happiness, well, you may be mistaken. But the area of the research that I'm really excited to dive into today is the data that looks at people who use money to buy happiness, back to what my son was talking about. Because the studies do indicate that regardless of income, how you spend your money does matter relative to happiness levels. In other words, some people at the same income levels report greater happiness because they understand a few key points. And that's what we want to get into. So to kick off these key points, Bright, I've got a question for you.

Bright Dickson (04:17):

All right. Shoot.

Brian Ford (04:18):

All right. So if you had an extra couple of hours in the day, what would you do with it?

Bright Dickson (04:26):

Well, I would like to say that I would use that time to invest in one of my hobbies or something like that, or a relationship. If I'm honest, though, I would probably use it to work a little bit more and then to sleep. I'm not proud of that answer, but that is the honest answer.

Brian Ford (04:46):

Right on. Look, hey, that's what this is about. I know for me, I definitely would hang out with the kiddos a little bit more. I would relax probably with my wife a little bit. But the reason I ask is because I came across a study that came out a couple of years ago. It's called Buying Time Promotes Happiness. And what the outcomes of the study suggest is that we're happier when we spend money to free up time, like having our groceries delivered or getting our clothes dry cleaned, as opposed to buying things. Bright, what do you think about this idea of buying time promotes happiness?

Bright Dickson (05:26):

I think that's probably right. I think it depends on how you're buying your time and what you're using that extra time for. I made an online grocery order today that's going to be delivered at some point because the idea of just going to the grocery store for whatever reason was stressing me out. And I was like, Oh yeah, I don't actually have to do that anymore. So I think it really makes sense. And I also think that if there are certain chores or facets of life or errands that really drag you down for some reason, and that time could be used in a way that brings you up and brings you energy and is part of what you really want to be doing with your life, yeah, that's going to result in more positive emotion for you in that day.

Brian Ford (06:15):

Yeah. I think you said a couple of important things. One is it needs to be a task that you didn't want to do in the first place. And then you need to replace that with something that brings you happiness. So maybe I'm going to get in trouble for saying this, I know, maybe get some nasty emails. I don't know. But maybe like endlessly scrolling through social media to fill that time may not work, but it may for you, I don't know. But filling that time with something that you really enjoy. And some people I think may feel a little guilty by doing this, by freeing up maybe, or outsourcing something. But I think we should be careful of that. I don't know if that... What do you think?

Bright Dickson (07:00):

Yeah. I think that's definitely true for some people, because I think... I've heard people talk about it as shoulding on yourself, right? S-H-O-U-L-D. Right? So-

Brian Ford (07:13):

Are we allowed to say that on the podcast?

Bright Dickson (07:17):

I'm going to say it. I'm going to do it. I'm going to take the risk. Right? This idea that there are things that we should be doing to be a good homeowner or employee or whatever role that you're filling, that we should be doing that thing. I think about it in particular around housekeeping. You know that I love thinking about interior decorating and how things look. That love does not extend to cleaning my house. Right? The idea of dusting my floorboards makes me so bored. I can't even stand it. Right? So essentially, I just don't do it. But then I see the dirt, and it's annoying. And I think about it. And then I kind of should on myself about, oh, I should be doing that. But really, I do not want to. It does not bring me joy in any way. Having it done brings me joy. Right?

Bright Dickson (08:09):

So for me, having a house cleaner come in once a month and do these chores that I don't want to do, it's a win-win for me, because I don't have to do it, but it is done. And so I think for me, yeah, it does make sense in certain things, but I also think it's what's important to you, right? Some people love going to the grocery store and doing that and picking things and looking at all the produce, others don't. It's not a joy. So really, I think it comes down to what does and doesn't drive joy for you.

Brian Ford (08:41):

Yep. I agree. I like this idea of not letting other people's expectations in a certain area of our life drive what we do. I like that. Same thing for me. I'm just not a fan of mowing the lawn, but I've got friends that love it. It's kind of their downtime. They get a little exercise. So it's all about how can you free up some time in order to do things that make you happy, that make you feel like your best self? So I liked the idea of buying time can free us up to pursue goals we care about, whether those goals are related to work, school, family, play. But I like the idea. It's good stuff.

Bright Dickson (09:21):

Mm-hmm (affirmative). Me too. Okay, Brian. Now it's my turn to ask you a question. So what's your favorite trip you've ever taken with your family?

Brian Ford (09:33):

Well, if my wife had it her way, we would go to Disneyland every year. But this one year, I arm wrestled her into taking me and the four kiddos on a road trip. So we rented an RV. We went to Yellowstone National Park. We went to Mount Rushmore. It was this week long road trip. Just wonderful being outside, hiking a lot, spending time together. So not only was it my favorite trip, but to this day, if you ask my kids, they will definitely say the same. So that was a fun one for us.

Bright Dickson (10:11):

I love that. I've never been up to that area. I really want to go. Maybe I'll put it on my list. So I asked because I found a study recently from The University of Texas at Austin that suggest we're happier spending money on experiences rather than on things, items, stuff. And that's because of the excitement we get building up to the trip and the memories after that bring us joy. Right? And so it's really interesting. There's a lot of positive psychology in here. But one of them is this idea of savoring. Brian, have you heard of savoring?

Brian Ford (10:51):

It sounds cool. Okay. I'm going to say no.

Bright Dickson (10:55):

So savoring-

Brian Ford (10:55):

But, yeah, I don't.

Bright Dickson (10:55):

That's fine. That's fine.

Brian Ford (10:58):

Give me some knowledge. I don't know.

Bright Dickson (10:59):

So savoring is essentially sort of how we pay attention to experience in a positive way. Right? So just like you'd savor, or maybe your son would savor that ice cream while he's eating it. Right? Just being really in the experience. And there are three types of savoring. So you can think of it as sort of future, present and past. So the anticipation of the experience, thinking about, oh, here's what we're going to do on our vacation. I want to try and have this moment with this person. I can't wait to eat this thing at this restaurant. That anticipation of the event or the experience. Then there's the actual experience of the experience, being present in the experience, which I know for so many of us is really, really challenging. And then the third type is sort of that reminiscing over the good memories you have and those memories. And what we find is that when people savor in any of those three ways, the experience actually ends up being more positive than if they didn't really take the time to think of it.

Brian Ford (12:10):

Yeah. I love that idea. Plus I love this cool new way of using the word savor. I'm going to sound like I'm wicked smart when I talk to my family later tonight. But I like that. I believe that. I like this idea of experiences over things. That's something that I know to be true in my life. My family feels the same way. And I would say that I am an anticipatory savorer. I love the idea of thinking about the vacation, planning for it, talking about it. So that's kind of where I'm at. I will say I've gotten better over the years of enjoying the actual experience. It's something I've consciously worked on. And my family and I, when we're out and about, it's like, all right, guys, let's put down our phones. Let's not have to take a picture of everything. Let's just enjoy this moment right now. And we've gotten better at it. So that's pretty cool.

Brian Ford (13:06):

But I will say I'm not much of a reminiscer. I don't look back as often as I think I could. So I think I'm missing out on the third facet of savoring. But I like that. I appreciate that explanation. That's good stuff.

Bright Dickson (13:19):

Yeah. It's interesting to think about it. My friend and I had, when we learned about this in graduate school, we started telling each other in those good moments when we were doing something, having fun, learning, whatever we were doing as a positive moment. We would look at each other and go, "Savor now," as a little reminder of this is a good thing. But when you think about the experiences versus things idea, another principle that comes in here is this idea of hedonic adaptation. So let me break this down. So hedonic means pleasure. So it comes from the Greek word hedon which you can think of as like, you might call someone hedonistic, right? So hedonic adaptation, which essentially means that when we have something that's pleasurable to us, we adapt to having that thing just like we adapt to all sorts of things.

Bright Dickson (14:15):

So this is why when you get a new car, or in my case, a new Tommy car, that's how I buy my cars, what really happens is that for maybe two to three weeks, you're really excited about it. And you're into your car. And you're like, oh, look at this new feature, and look at that thing. Oh, I've got a backup camera. You get excited. And then you just adapt. And you've got a car, and you also have a car payment. So we adapt to these things that we get, and they just become part of what we consider baseline normal life instead of that... the new car smell wears off, I guess, is what I'm saying. And that's hedonic adaptation. And what can happen is hedonic adaptation turns into what's called the hedonic treadmill, where you're just going after a new thing and a new thing and the next thing and the next thing, but it really actually brings you no more happiness or wellbeing than it would if you didn't have any of those things at all. Isn't that interesting?

Brian Ford (15:20):

Fascinating. I love it. I know it happens in my brain, but now I know what to call it. It's good stuff. I like your example of the car. I will say as one who confesses or professes to be a financial nerd, I have seen this not with a couple of people, with hundreds of people, where they'll talk about the desire to spend more time with their spouse or partner, to be more with their children, to have more free time on the weekends. And then all of a sudden, they're buying a car that they can't afford and that they think may bring them greater happiness, would probably does for a time. But then they realize that that payment is probably more than they can afford. I think that car is a great example, Bright. I really do. I've seen it time and time again.

Brian Ford (16:10):

Now, it's not to say that you don't need a good car that's safe, that gets you to and from work, and gets your kiddos where they need to go in a safe way. But going after that kind of a... I don't know. I'll tell you, my wife and I, this happens with us. We'll be watching a car commercial, and we're like, "Dang. We would look good in that." And then we look at each other and we're like, "What the heck does that have to do with what we really care about in life?" And we have to remind ourselves that when we list the things that we care most about in life, we usually don't put looking cool in front of people we don't know. But we do put spending time with one another. We do put free time, eating out with one another.

Brian Ford (16:53):

So I think it's a good example. And I am a big believer over experiences rather than things. Well, Bright, I want to mention another area of the research that we came across, that supports this idea that money can buy happiness. And it has to do with giving. Just quite a few studies out there that show this, but I'd also say our own personal experiences back up the fact that it feels good doing something nice for another person. And Bright, I know we've talked about this in a previous episode, it was called Giving Back Feels Good, but I think your explanation for why giving can create a good feeling was nice.

Bright Dickson (17:39):

Yeah. So it's pretty simple. So when we give, or another way to think about this is when we do something kind for someone else, so it doesn't just have to be giving money, it's when we take an action to benefit someone else, we get a dopamine hit in our brains, right? Our brains release that hormone, that feel good hormone. And so it rewards us almost immediately for doing that thing. So I think that this absolutely is another way that money can buy happiness, but it's not the way we think it is, right? It's not by buying an item, it's by doing something that gives you an experience. Right? So it's that experience thing right again.

Bright Dickson (18:20):

And I think it's a great thing for people to think about. You can absolutely go back and listen to that whole podcast. We encourage that. But just notice what that experience does for you, and that it tends to be self-reinforcing, right? So when we do a kind thing for another person, we get that dopamine hit and our brains are wired to want that again. So then we go do that another kind thing again. And that builds this upward spiral of positive emotion.

Brian Ford (18:49):

Yeah. And we talked about this as well, that it's not always about the money. It can be about time. It can be about sharing your talents. But certainly, that whole idea that giving feels good. It can help us to be more happy. I think it's important to realize that the research does support that. So spending our money on freeing up time or experiences and even giving, it's all great, but we still have to make sure we can actually afford it. And that's where values based budgeting comes in, which is exactly what we'll cover in our next segment. Stay tuned.

Brian Ford (19:30):

So real quick here, Bright. I'm going to take a little time out here. I probably segued a little early. I think we still have some good things to chat about in this like as far as maybe buying some things that can help with those. Do we want to go back and do that?

Bright Dickson (19:45):

I think we could do it in the next section. I think we can work it in there. Right? So, yeah. And I can do the paddle board example. I think we can work it in there.

Brian Ford (19:57):

I like that. All right. Cool. I'll just jump right back into the third segment for Budgeting for Your Happiness, and we can talk about some of these things and paddle board and so forth. All right. Cool.

Brian Ford (20:12):

I think you all know I'm a big fan of values-based budgeting as a way to help us spend on what really matters most. And the basics of values-based budgeting are first, we need to figure out what's most important in our lives, what really matters to you. And then, we need to spend and save according to those values. And that's pretty much as simple as it is. That's really what values-based budgeting comes down to.

Bright Dickson (20:40):

So it sounds, Brian, like it's about kind of creating space in our budget for the things that make us excited to budget-

Brian Ford (20:48):

Yeah, exactly.

Bright Dickson (20:48):

... to get the things we really want.

Brian Ford (20:49):

Yes. Bright, maybe you don't care about college football, but it's important to me, so I'm going to prioritize that in my budget where I can. You, on the other hand, probably would have a category for home decor and so forth. It's exactly right.

Bright Dickson (21:03):

I certainly do. And I think it's interesting that these things are really different, right? It's going to be different for everyone. And at the same time, you've got to make sure that you're taking a logical approach to the ability to create joy and energy for yourself and not only thinking about the basics. Of course, you have to cover the basics, but really doing that understanding of what do I really care about, and how am I going to spend that money in that way? And I think for so many of us, separating what we really care about from, again, what we think we should care about, there's a little process of self analysis in there that can maybe have us learn some things about ourselves that we didn't know before.

Brian Ford (21:48):

That's exactly right. We can talk about these things we care most about in life. But if we then go look at our bank statements and see where our money's going, we would want to ask the question, are those two in harmony, and what values-based budgeting submits is? When your values or those things you care most about in life are in harmony with the way you spend and save and even invest, that's when money happiness occurs. Now, I will say though, sometimes when I'll talk about values-based budgeting, people get a little overzealous, and they're like, "Oh. Well, I love this thing, so I can spend money on it." And I will remind folks that you still have to have money. We're not advocating for buying stuff that you can't actually afford. However, we are saying, "Let's make room for it in your budget." But that sometimes means doing less of something that you don't care about, even though maybe someone in your life is saying that you should, like you talked about earlier, Bright.

Brian Ford (22:50):

So it is making sure we can afford it, but it's about spending less on the things we don't care much about, so we can get more of the things we can. And we know that people who budget in this way, they're happier with their money.

Bright Dickson (23:02):

Mm-hmm (affirmative). Yeah. It's been interesting to me personally to go through. I did this exercise with myself that I printed out my bank statements for a couple months back and went through with my highlighters because I also love office supplies and coded them based on, okay, is that a necessity, is that a utility, is that mortgage, or is that some kind of extra spending that I don't really maybe need or not? And it was a really interesting exercise for me to see how much money I was spending on things that I didn't really care about and that weren't saving me any time. There were things that weren't actually giving me much benefit at all. And I've done a really good job in the past month or so of cutting those things out. And it's a relief to be able to do that. Yeah.

Brian Ford (23:59):

I am smiling, Bright. I love this. This is fantastic. You're budgeting. I'm dropping hedonic treadmill verbiage on my family, and sounding super smart. This is good. This is good. Well-

Bright Dickson (24:17):

We all have room to grow.

Brian Ford (24:18):

Yes. And I know we've talked about this, Bright, but we've been talking about experiences over things. But what about things that help you enjoy the experiences a little bit more? There's got to be something there, right?

Bright Dickson (24:39):

Yeah, man. It's the gear question, right? Like with some things that are experienced, you've got to have certain items to be able to do those, right? For example, I love paddle boarding. There's lots of water around where I live. For me, it's a really great way to get out and do something I might not do every day, get a different perspective, get some exercise, jump in the water. I love it. But here's the deal, you can't paddleboard without a paddle board. So I can't actually have that experience if I don't have access to a paddleboard. And they're not that cheap, right? A good quality paddle board is going to run you a couple hundred bucks at least, right?

Bright Dickson (25:24):

So I had to make the decision. All right, I know I love this experience. To enable this experience, I have to have this item. And then I budgeted and saved up for a couple of months to buy a paddle board. And now I have one. And I have got the ability to go out and do it on my own whenever I want, which is so freeing and such a great experience. Right? So I think we've got to keep in mind that a lot of kinds of experiences really do require you to buy something. But now that I have one paddle board, I don't need another, right? So I'm not on the hedonic treadmill, because the need is now satisfied, and now I can concentrate on the experience.

Brian Ford (26:04):

I love it. Same thing for me with hiking. I love hiking. And I realized I need a good backpack, I need some good shoes. But now I've got those things, they'll last me 10 years. And now it's all about the hikes, literally dozens and dozens of hikes. But I think that was a good point just to bring up. I've loved today's conversation. I love how we're just keeping it real, because I think a lot of us grow up hearing money can't buy happiness. And the research just doesn't support that. But on the other hand, we also grow up thinking, man, if I can just make more money, I'm going to be happier. And the research doesn't support that either. I love that we've really dove into and gotten right into the heart of how money can buy happiness when done right. And I like the idea of how money can free up time. I love the idea of experiences over things. And I love the idea of giving back, of doing something nice for folks. I thought it was a great conversation.

Brian Ford (27:10):

Hey everybody, thanks for tuning in to this episode of Money and Mindset with Bright and Brian.

Bright Dickson (27:14):

If you enjoyed our chat, consider subscribing, or maybe share it with someone you care about. You could even talk about it over a nice cup of coffee. We'll see you next time.

Brian Ford (27:25):

See you, everybody.

Speaker 4 (27:31):

Hey, we made it through.

Speaker 1 (27:32):

We did it.

Brian Ford (27:33):

Holy smokes.

Bright Dickson (27:34):

Yay.

Speaker 1 (27:39):

All right. So let's redo the outro.

Brian Ford (27:43):

I agree.

Speaker 1 (27:45):

There was an awkward pause there.

Brian Ford (27:47):

Uh-huh (affirmative).

Speaker 1 (27:47):

And then let's go ahead and redo the intro again like we normally do, especially now that you're in the groove and we are beyond the frustrating technical difficulties.

Brian Ford (28:02):

We hope.

Speaker 1 (28:03):

Hopefully, yes.

Brian Ford (28:04):

Yeah.

Bright Dickson (28:04):

Knock on wood.

Speaker 1 (28:05):

I will save it right now just in case we get cut off again.

Brian Ford (28:09):

Okay. I'll do the outro again. And I won't do like a crescendo, I'll do more of like a whatever the heck the opposite is and music of that, because I think I was like, with Bright and Brian. And then it was weird for her to then segue. So hopefully this will work. If it doesn't work, then maybe one of us will just tackle the whole outro, but let's give it a try.

Speaker 1 (28:38):

Okay.

Brian Ford (28:38):

Okay.

Speaker 1 (28:38):

All right. I'm going on mute.

Brian Ford (28:39):

Okay. Thanks for tuning in to this episode of Money and Mindset with Bright and Brian.

Bright Dickson (28:54):

If you enjoyed our chat, please consider subscribing or sharing it with someone you care about. You might even talk about it over a nice cup of coffee. We'll see you next time. I wonder if the coffee thing makes sense anymore since we didn't really get into the coffee thing.

Brian Ford (29:14):

We didn't use that example, I know. We were going to kind of hammer on how a lot of financial gurus love to talk about cutting out coffee, and how Bright and I think that's ridiculous. The research doesn't really bear it out. And especially if you value it and like it, but we didn't get into that. So it's not-

Speaker 1 (29:29):

You could maybe say, talk about it while on a hike or something, because you did talk about-

Brian Ford (29:35):

Paddle boarding. You should say that, Bright. Seriously. Talk about it next time you're on a hike or maybe even paddleboarding. Seriously.

Bright Dickson (29:43):

Right. I will.

Brian Ford (29:43):

All right, let's do it again. I really enjoyed today's conversation. Thanks for tuning in to this episode of Money and Mindset with Bright and Brian.

Bright Dickson (30:00):

If you enjoyed our chat, please consider subscribing or share it with someone you care about. You might even talk about it while you're hiking or paddle boarding or whatever you like to do. We'll see you next time.

Speaker 1 (30:17):

That was nice. I feel like that put a nice little bow on your conversation.

Brian Ford (30:24):

Cool. Should we rock the intro?

Speaker 1 (30:26):

Yeah. Let's do the intro, and we can tell it a day.

Brian Ford (30:42):

Okay. Welcome to Money and Mindset with Bright and Brian, where we combine financial advice and positive psychology to help you find the joy in managing your finances. In each episode, we share practical advice for managing both your money and your outlook. I'm Brian Ford. I specialize in financial wellness. And I'm here with positive psychology rock star, Bright Dickson. Today on the podcast, we're going to tackle the question of can money actually buy you happiness. We'll get into what the science has to say about money and our wellbeing, and then leave you with a few good tips on using your money to create a happier life. Sound good, Bright?

Bright Dickson (31:20):

Absolutely.

Brian Ford (31:24):

Wicked sweet music rocking out. Yeah. By the way, I do like your guys' choice in music.

Speaker 1 (31:34):

Well, thank you.

Brian Ford (31:35):

My kids, when they listen to it, they dance.

Speaker 1 (31:37):

Oh, that's great.

Speaker 4 (31:40):

That's so cool.

Brian Ford (31:43):

How'd we do on that? We good?

Speaker 1 (31:45):

Yeah, that sounded good to me.

Brian Ford (31:47):

It felt good.

Speaker 4 (31:49):

Yeah. I thought it was-