The question of whether money can buy happiness has produced a wide range of answers from experts. Dr. Jordan Grumet, a hospice doctor and author of The Purpose Code, says the answer is not that clear.
“I’ve looked after people at the end of my life and have seen people of all economic classes,” Gourmet tells CNBC.
“I tell you, money doesn’t seem to correlate. It’s not really. I’ve seen really, really happy poor people, and I’ve seen really, really, really miserable rich people.”
Grumet has discovered a truly distinguishing correlation among the happiest people he has transitioned to the end of his life. In a recent article published in Psychology today, he called it “the most overlooked and most powerful use of money.”
According to Grumet, this is the biggest way you can spend your money for a happier life. That’s what we all think can do on any budget.
According to Grumet, money can actually buy happiness one way
Invest in your personal growth
“The happiest people I see are those who don’t regret, and those who don’t regret, whether they spend their money or not, will want to be the person they want, energy, courage and time,” says Gourmet.
“The most persistent kind of spending is when we spend to be a better version of ourselves. That’s when we spend money on actually resonating deeply with us, connecting with the people we want to be as people.”
Some examples of investments in personal growth are to spend money on a coach who can help you become a stronger writer, or buy good running shoes because you like running.
Grumet believes that spending money on opportunities to grow as a person will help develop meaningful connections, leading to lasting happiness. According to decades of research from Harvard University, having close personal relationships that you cherish is the primary way to improve your well-being.
“You tend to connect with others, you tend to be part of the community. I call them an internal purpose community,” says Gourmet.
And investing in yourself doesn’t have to be expensive, he explains.
“If you want to be an explorer, you can spend $10,000 or $15,000 in planning a trip to Machu Picchu. But if that’s really what you want, even locals have many ways to become someone to explore. You can take part in local hiker groups and restaurant tours.”
“Just because you don’t have much money doesn’t mean you can’t spend on something deeply important to you.
There are two ways to spend that won’t give you permanent happiness, he says.
1. Spend money on experience
While it doesn’t provide as long-term happiness as investing in yourself, spending on experiences is a good way to increase the likelihood that you will still feel happy.
“For example, we go on a trip. We spend money to schedule a trip (and) we get all that expectations,” he says.
“Then we go to the trip itself. When we are on that trip, we get all that joy. We get all the memories.
Still, there are limits to spending money on experience. When you feel excited from one experience, you are more likely to want to try new experiences that will bring even more joy.
That’s what is called a pleasure treadmill. “We’re chasing more and more experiences and trying to get the most juice out of the squeeze, but we’re a bit adapting,” says Gourmet.
“For example, it’s really exciting when you’re in Europe for the first time. The second time isn’t a bit exciting. If you do it many times in the year, it’s not even more exciting.”
2. Buy things
To buy like food or water, you need something specific. But when it comes to buying things like clothes or jewelry, it usually fades quickly, says Grumet.
“There’s no problem buying what you enjoy, but it’s probably not going to give you lasting happiness,” he says. “What I call the cheapest version of spending is spending on things.”
Like spending on experience, buying things can lead to hedonistic adaptations. There, we are looking for the next best thing to quickly boost dopamine until the spark of joy levelles.
The caveat to this form of spending is when you buy things for others, he points out. “When you sometimes buy things for others and see pleasure in their faces, it’s probably a little more durable and lasts a little.”
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