5 Steps to Financial Happiness

“Some financial habits bring greater satisfaction than others.” That’s the gist of a study by University of British Columbia psychology professor and author Elizabeth W. Dunn and colleagues. In their study, titled, “If money doesn’t make you happy, then you probably aren’t spending it right,” the authors outline eight principles for financial happiness. Here are five of them.

Principle #1: Buy more experiences and fewer material goods.

From a financial standpoint, many things we buy depreciate almost immediately. The most common example is a new car: it loses 15 percent to 20 percent of its value the minute you drive it off the lot.

Experiences, on the other hand, are priceless: — a fishing outing with one of your children, a concert with your best friend, a road trip, hiking the Grand Canyon, a family vacation. Memories don’t have to cost a fortune, but they can last a lifetime.

Principle #2: Use your money to benefit others.

The authors recommended making a donation to your favorite charity on the same day each year; say your birthday, Valentine’s day or Christmas.

Short on cash? You can also do a lot of good by donating your possessions, your time or your talent. You can read a book to the elderly or the sick, you can help build homes with Habitat for Humanity or you can donate things you don’t use anymore to a local charity.

Principle #3: Buy many small pleasures rather than fewer large ones.

Some people work hard 51 weeks a year and then treat themselves to one decadent week of vacation, or they splurge and buy themselves an extravagant gift. Instead, the authors suggested that indulging in several small pleasures leads to more happiness. To some degree, it makes sense. Little bits of happiness throughout the day, the week or the year would maintain your happiness tank on high.

Small pleasures might include dining out, getting a massage or organizing a surprise for someone. Of course, some small pleasures are completely free, such as a walk in the park or enjoying a sunset.

Principle #4: Delay consumption.

This is probably a much harder concept to grasp and implement in our instant gratification society. Stores constantly encourage us to “buy now, pay later.” This may be great for short-term happiness, but it’s a surefire way to get into debt.

Paying now and consuming later is a better strategy for two reasons: it keeps you out of debt and it creates anticipation (which itself causes pleasure). In other words, delayed gratification is a better recipe for happiness.

Principle #5: Beware of comparison shopping.

Consumer behaviorists tell us that people are actually happier with fewer choices. Otherwise, we may face analysis paralysis or buyer’s remorse, neither of which is good. Think about the last time you had to buy a camera, printer, computer, car or mattress. How often did you feel 100 percent convinced that you made the right choice? Experts recommend you do your research, make your selection and don’t look back.

Ultimately, some of our unhappiness is self-created: we compare ourselves with our neighbors, our friends, people on TV or in tabloids, our school classmates or our soul mates. A wiser way to live may be to only compare your life with your life.

Aim to be better off this year than last year in every aspect of your life: happiness-wise, financially, socially, educationally and physically.

Dr. Zeltzman is a board-certified veterinary surgeon and serial entrepreneur. His traveling surgery practice takes him all over Eastern Pennsylvania and Western New Jersey. You can visit his websites at DrPhilZeltzman.com and VeterinariansInParadise.com.