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Learn how to use money to buy HAPPINESS!

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Learn how to use money to buy HAPPINESS!

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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."
Read more: 5 ways you can trick yourself into becoming a better saver The costly mistakes people make when weighing new job offers 5 reasons someone making $75,000 would live paycheck to paycheck

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money; happiness; wealthy; get there; gethero; gettherebiz

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Money can buy happiness - if you know how to use it

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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.

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Look at this cool video about How to Buy Happiness!

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Look at this cool video about How to Buy Happiness!

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At TEDxCambridge, Michael Norton shares fascinating research on how money can indeed buy happiness -- when you don’t spend it on yourself. Listen for surprising data on the many ways pro-social spending can benefit you, your work, and (of course) other people.

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Can money buy happiness? According to the old adage: No.

But a Harvard Business School professor says yes. But how much happiness you can buy depends on how you spend your money.

"We're really underspending on the things that make us most happy," says Michael Norton, a Harvard Business School professor, who has researched the science of spending.

With the holiday shopping season around the corner, Black Friday buyers may want to reconsider their wish list.

It turns out people generally get more happiness spending their money on experiences than on stuff. That's even though experiences are temporary -- dinner with a friend or a vacation -- while stuff like TVs, computers and smart phones last longer.

Related: Good retail news: Walmart tops forecasts

"It seems odd that things that disappear could make you happier than things that stay," Norton said at the New York Times Dealbook conference earlier in November.

When we spend on things like a TV or a phone, it often leads to activities that are typically done in silence such as watching shows alone or using apps to play solitary games, Norton says.

But on a vacation, people bond with friends and family, see new places, learn new things and create memories. The same holds true with relatively inexpensive experiences like going out for dinner with friends.

Experiences make you happier before they even happen

Even the anticipation for both is different.

Buying a big ticket item sometimes involves waiting that feels stressful. People may worry about whether they bought the best kind of TV or phone for the price, whether it will arrive on time or will it be damaged when it arrives.

So even before the purchase arrives, it can be filled with anxiety.

After it arrives, there is the stress of configuring the TV or phone, and the fact that it has already lost some of its value.

On the other hand, waiting for an experience -- such as a vacation or dinner date -- can feel exciting. In fact, the happiest day for people going on vacation is the day before the trip, not the time on the trip itself, Norton says.

"Even before they happen, experiences make us happier than stuff," Norton says.

He uses honeymooners as an example. Before their honeymoon, couples often say they will be "on the beach with wine, intertwined, looking into each others' eyes."

Related: Macy's expects poor holiday sales

But the experience may not live up to the hype. A plane is delayed, the hotel disappoints, or worse for honeymooners, "maybe you find out about some exes you weren't aware of."

But after the experience is over, people often tend to remember the happy moments, creating a rosy recollection of memories. Years later, the ex-girlfriend or -boyfriend that irritated during the honeymoon is long forgotten, says Norton.

"Because experiences disappear, they let us make up a reality that was amazing and wonderful, and they make us happier," than stuff, Norton said.

CNNMoney (New York) First published November 20, 2015: 4:04 AM ET

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Money really can buy happiness, Harvard prof says

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But a Harvard Business School professor says yes. But how much happiness you can buy depends on how you spend your money. "We're really underspending on the things that make us most happy," says Michael Norton, a Harvard Business School professor, who has researched the science of spending.

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Check out this AMAZING article from time.com!

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Check out this AMAZING article from time.com!

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5 Ways Money Can Buy Happiness, Backed by Science

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Money can buy happiness if you know how to spend it.