Impulse shopping can make you feel really good for a fleeting moment, but when the realisation sets in that you bought something that you didn’t really need, the positive feeling tends to disappear pretty quickly.
According to research by Dr Howell at San Francisco State University, you’ll be happier if you think before you buy. The research also found that happiness has a significant impact on spending habits.
Whether it is a conscious decision or not, happy people have different spending habits to unhappy people.
How do happy people manage their money?
1. They eliminate credit card debt
Dr. Howell stresses the first step to maximising happiness is to get out of credit card debt.
Credit card debt hangs over you and is a fast track to worry and unhappiness.
2. Income leftovers are saved or invested
Once their necessities are paid for, including household bills, groceries, petrol and credit card balance happy people save or invest 25% of what is leftover.
3. They pay it forward
Out of these leftovers, happy people will donate about 12% to charities, community non-profits or even gift money to other people.
4. They track themselves
Happy people keep track of what they spend. Keeping track of their spending causes their brain to critically analyse each purchase decision, which helps them control impulse buys.
5. They use cash
While Australia is moving closer to a cashless society, happy people tend to use cash for purchases. It’s more difficult to throw away physical money than putting it on card. It also cuts down on unnecessary interest costs.
6. They spend on life experiences
Happy people get excited about spending their dollars on items or experiences that create memories or improve their quality of life. They tend to spend about 40% of their leftovers on holidays or books.
7. They know what they want
A recent Gallup poll reported that people are genuinely more happy when they save more than they spend.
The study links this with having a lack of clear vision about what you are saving for. Instead of focussing on saving $200 once a week, write down what your savings goal is, like a Fiji holiday or a wellness retreat.
Life doesn’t always run according to plan, but money won’t solve your problems. Rather, spending it wisely or choosing to invest it smartly will make life easier.
Source: Yahoo Finance