As humans, we are almost always aspiring to land the next promotion or the next big raise, or to strike it rich some other way.
But a new report offers hope for those of us who have yet to win the lottery.
Researchers at the University of Cambridge concluded in a study released this month that money can indeed buy happiness. But the secret, they found, is not how much cash you have. It’s what you do with the money you have.
After analyzing people’s personalities and money habits, the researchers found that people who spent more of their money on the activities and causes that were important to them were more satisfied with their lives. It gives a new sense of importance to the phrase “know thyself.”
“People should stop worrying too much about making more and more money and start asking themselves how they can use the money they have in a way that benefits their happiness,” said Sandra Matz, a PhD candidate in the psychology department of the University of Cambridge and one of the authors.
Matz and her colleagues analyzed close to 77,000 financial transactions completed by 625 consumers in Great Britain over six months. The transactions were organized into 59 categories that were matched with different personality traits, such as openness to a new experience or if someone is self-controlled or easygoing.
The participants were also asked to answer online surveys that gauged their personality types and they were polled on how happy they were with their lives.
In general, people spent their money in ways that were in line with their personalities. For example, extroverts spent about $60 more a year at bars than introverts. And people who were mindful of their health spent about $140 more a year on health and fitness than people who were less concerned with health.
Researchers conducted a second experiment where people were given money and required to spend it a certain way. Again, people who had to spend the money in a way that fit their personalities were more satisfied with their experiences. Extroverts who were required to spend their voucher at a bar, where they would be able to socialize, were more satisfied with their experience than introverts who were sent to bars. And introverts who were dispatched to spend their cash at a book store were happier than extroverts who were sent to book stores.
To be sure, though, having more money on hand can still make life a little easier. Once the basics like food and shelter are taken care of, people may be more likely to have the income they need to help meet some of their other goals and needs. And some people with low incomes may not have enough extra cash to worry about whether their spending matches their personality or other goals, Matz said.
But when you do have extra cash, the lesson is that it pays to think carefully about what you’re really trying to accomplish, Matz said. “Oftentimes we just buy stuff that our friends have our that our impulsivity lends us to buy,” she said. “What we should do instead is ask ourselves whether spending money on a certain product will actually help us to lead the lifestyle that we want to lead.”