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Having money does not guarantee happiness, but using it strategically can help.
That’s according to a recent study published in the journal Psychological Science by researchers from the University of Cambridge. The study is based on the analysis of nearly 77,000 bank transactions by more than 600 people.
The researchers found that it’s not how much money you have that influences your sense of satisfaction. It’s what you do with the money you have that really makes a difference.
“When spending matches the buyer’s personality, it appears that money can indeed buy happiness,” the researchers concluded.
According to an article at Quartz, the researchers looked at people’s spending habits and personality attributes like openness, conscientiousness, extroversion, agreeableness and neuroticism. They found that people who spent their money on experiences or causes that were important to them and that more closely matched their personalities were happier.
For example, extroverts who spent more money going to the pub and eating out reported higher life satisfaction, ITV reports. Likewise, people with a more agreeable personality type (more compassionate than competitive) who donated their money to charity or other causes they value were also happier. For people deemed conscientious, paying off bills and working out did increase their happiness.
“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,” said Sandra Matz, one of the study’s authors.
The researchers conducted an experiment in which they gave people money and told them to spend it in a certain way. The results were the same. People who spent money in a way that fit with their personality (an introvert spending money in a book store or an extrovert spending money in a pub) reported feeling more satisfied than those who had to spend their money on something that didn’t fit with them (an extrovert spending money on books or an introvert having to spend money in a pub).
“The authors caution that their data shouldn’t be taken as a how-to guide on spending — accountant fees and home insurance may be rated as suited to introverted people, but spending a great deal on such products is unlikely to make anyone happy,” Quartz said.
Still, the study’s findings are a reminder for all of us to think about what we’re spending our money on.
“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,” Matz said.
What do you think about the study’s finding? How does your spending affect you? Sound off below or on our Facebook page.