When it comes to investing, most people recognize that relying on their own intuition is insufficient. But when it comes to spending that money, we often think we know best what will make us happy. Just as an entire industry of financial experts exist to help with investing, an entire industry of marketers exists to sell us as much as possible. If human happiness is even half as complicated as the stock market, there is little reason to assume that intuition provides a sufficient guide for spending decisions.
Over fifty years of psychological research has shown that most of the “action” in human thought and emotion takes place beneath the level of conscious awareness. Professors Elizabeth W. Dunn and Michael I. Norton condense a review of the scientific literature in Happy Money: The Science of Happier Spending and offer specific recommendations for a more structured decision-making process with which money can actually buy happiness.
The authors recommend five principles that are united by a mindfulness about spending. Capitao’s take on these principles, with selected examples and additional embellishments, can be accessed here: