Spending more does not make you happier

As we earn more, we spend more, but it's better to acquire experiences instead of things

I make no claims to being the next Eric Clapton but I dusted off my old guitar recently and started playing and singing again.

To be honest, my guitar "skills" are limited to clumsily strumming only the most basic tunes while I have the tendency to sing off-key without realising it.

But there's no doubt that I've enjoyed making (bad) music again, singing to unwind after long days at work.

And this method to relax doesn't cost very much.

My guitar cost me about $150 to $200 years ago - it was second- or third-hand. My friend who sold it to me had convinced me that it was worth it because the instrument has good acoustics or whatever.

I can't really tell but this $200 has brought me much happiness over the years, from singing with my hall friends when I was in university to helping me relax after work nowadays.

Many people spend much more money for the privilege of singing out of tune.

They may buy karaoke systems for thousands of dollars or go to karaoke outlets, where the costs add up over time.

I've been thinking a lot about how to achieve maximum happiness in our lives without spending too much money.

As we earn more, it is natural we spend more on ourselves but it doesn't always make us significantly happier.

Japanese food used to be a rare treat for me. I reckon I ate at Sakae Sushi once when I was in university and dined at Sushi Tei once during my first year of work, and that's about it.

Now I indulge much more often, maybe once or twice a month and I even have a Sushi Tei membership card.

The costs are definitely higher compared with eating at a hawker centre but has the spending made me much happier? Probably not.

I used to get very excited about eating Japanese food and every slice of sashimi was a delectable treat.

But now it's just normal. I've eaten so much raw salmon that to me it's sometimes not any more tasty than the $3.50 chicken rice you can get in your neighbourhood hawker centre.

Many academics have studied this phenomenon, what psychologists call the "hedonic treadmill", or "hedonic adaptation". Your level of happiness quickly returns to a stable base level after a positive event, such as eating nice restaurant food.

In economics, this is called the "law of diminishing marginal utility". As people consume more of a good or service, the happiness from consuming extra will definitely decline.

If you eat sushi every week, you will definitely appreciate it less than someone who gets to eat it once in a blue moon.

So spending more money doesn't guarantee happiness. To put it another way, it is possible for us to be happy without spending a lot.

Whatever cash we fork out should be spent on buying experiences instead of things, psychologists say.

"Hedonic adaptation" happens faster when it comes to material objects. On the other hand, experiences tend to offer more variation and can make our happiness last for a longer period of time.

"Things like a new material purchase make us happy initially, but very quickly we adapt to it, and it doesn't bring us all that much joy," said Dr Thomas Gilovich, a psychology professor at Cornell University who has done studies on the issue.

"You could argue that adaptation is sort of an enemy of happiness. Other kinds of expenditures, such as experiential purchases, don't seem as subject to adaptation," he added in an article in the university's in-house newspaper.

Spending on experiences is also more likely to create good memories, academics say.

People often associate "spending on experiences" with going on holidays, which can be expensive too.

We can cultivate low-cost hobbies right here in Singapore which can add to our happiness.

Exercise is a good example, while you can also take long walks in the many parks on the island.

Others like the satisfaction of cooking - which incidentally leads to lower-cost meals than eating out.

You can also sing or play a musical instrument, as I do.

Another way to maximise happiness is to, perhaps ironically, spend money on other people instead of ourselves.

Many studies have shown that helping people in need boosts your own happiness more than spending that same amount on yourself.

Of course, the aim of donations is to help those less fortunate than us, rather than to feel good about ourselves. But we can achieve a win-win situation through charitable causes.

I donate a small amount monthly to charity. While I know I'm no Mother Teresa the small donations still make me feel pretty good about myself - better than if I were to spend it on yet more sushi.

It's pretty obvious that you don't need to incur high expenses to be happy. Just spend your cash wisely, including on other people.

For me, I'll go back to playing the guitar. It brings me joy, although the same probably cannot be said for those who have to hear me sing.


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