Part of being financially responsible is smart spending. But what if stretching your money is not about purchasing useful items, but prioritizing what makes you happy? Even if it's – dare we say it - avocado toast.
Avocado toast in a hipster café with a flat white to top it off. You can probably get 3 days' worth of groceries for the amount spent on just one lunch. For many, spending on such a meal is frivolous. Or is it?
Nobody can disagree that spending your hard-earned cash should be done smartly – after our bills, rent or mortgage have been paid of course. But the usual spiel on purchasing (more expensive) high-quality items that will benefit us in the long term, leveraging store programs or even buying on sale, doesn't match up with our current sharing economy. Not to mention the fact that many people are hesitant to make large purchases when they are insecure about their next pay checks.
Instead, a "smart" spend should be one that makes us happy, preferably in the long term. So how can we make the notion that money can buy happiness, a reality?
Invest in an experience
A 20-year study published in 2014 by Dr. Thomas Gilovich, a psychology professor at Cornell University, confirms that spending on experiences, especially when you're able to share those experiences with others, provide more meaning in your life than anything you can ever buy. And while we can't all go sky diving or jetting off to Hawaii, we can go for a hike or spend on a social experience, such as bonding with a friend over a shared meal (like avocado toast!).
Spend on someone else
A Harvard Business School study conducted in 2014 proved that, regardless of income, those who spend money on others are decidedly happier than those who spend more on themselves. The research has since been repeated the world over, and in every country, people say they experience more joy when they donate or spend money on someone else, as opposed to buying something for themselves.
There was also no relation to the amount of money spent: a 5-dollar gift for your mom makes you equally as happy as buying a friend a lavish meal.
Put your money where your values are
When you know your money is going to a good place, you feel happier about spending it. When you shop – for a service, experience, or item - think about who made it, who sells it, and where it comes from. Do you believe in organic, free-range, green, or socially aware products? Do you prefer to buy vegetables from a local shopkeeper instead of a conglomerate? You are not alone: more than ever, people care about the origins of the goods they buy - and you'll feel better when buying from a brand you trust.
Flex it up
A recent experiment by the American Sociological Review, concludes that having great flexibility in your work schedule, along with a manager that supports this flexibility, will improve your health and sense of wellbeing.
Employees with flexible schedules reported sleeping better, feeling healthier and experiencing less stress. (On a side note, the New York Times article on the study even reported a "cascade" effect on children of these employees: they, too, slept better and reported less stress when their parents had flexible work schedules.)
So how does this relate to smart spending? Perhaps you should level up your internet connection or buy a new laptop. Or choose to rent a home with an extra bedroom to create a comfortable home office. In short: if you make sure you have the tools to work from anywhere, you may be able to "buy" the same freedom and wellbeing.