How To Spend Money So It Brings You More Wellbeing

How To Spend Money So It Brings You More Wellbeing

Spending money so that it increases your happiness and wellbeing is an art form in itself.

People who spend more on things that fit with their personality traits are happier, new research finds.

For example, extroverted people are happier spending money in a restaurant.

In contrast, the introverted get more pleasure from spending money in bookshops.

A better fit between spending and personality was linked to life satisfaction more than total wealth or total spending.

In other words: it matters less how much you have or how much you spend — what really matters is what you spend it on.

The conclusions are based on an analysis of 76,863 transactions from 625 people over a six-month period.

The five personality factors were matched with their spending habits.

These are the five personality factors:

1. Openness to experience (artistic versus traditional).
2. Conscientiousness (self-controlled vs easygoing).
3. Extraversion (outgoing vs reserved).
4. Agreeableness (compassionate vs competitive).
5. Neuroticism (prone to stress vs stable).

And here are the links between personality and spending:

• More open people spent more on entertainment, hair and beauty and less on traffic fines and mortgages.
• More conscientious people spent more on insurance, health, fitness and less on gambling, toys and hobbies.
• More extraverted people spent more on entertainment and travel and less on insurance and accountant’s fees.
• More agreeable people spent more on charities and pets and less on traffic fines and gambling.
• More neurotic people spend more on traffic fines and gambling and less on stationery (!?) and hotels.

The researchers also carried out a second experiment that confirmed the link between spending and personality.

Dr Joe Gladstone, one of the study’s authors, said:

“Historically, studies had found a weak relationship between money and overall well-being.
Our study breaks new ground by mining actual bank-transaction data and demonstrating that spending can increase our happiness when it is spent on goods and services that fit our personalities and so meet our psychological needs.”

Ms Sandra Matz, the study’s first author, said:

“Our findings suggest that spending money on products that help us express who we are as individuals could turn out to be as important to our well-being as finding the right job, the right neighborhood or even the right friends and partners.

By developing a more nuanced understanding of the links between spending and happiness, we hope to be able to provide more personalized advice on how to find happiness through the little consumption choices we make every day.”

The research suggests that money can buy you happiness if you spend it on the right things.