Happy Money – Buy Time

“Most people would benefit from using their money to change the amount of time they spend on three key activities: commuting, watching television, and hanging out with friends and family.”

I have been summarizing key principles from Happy Money by Elizabeth Dunn & Michael Norton. This post is focused on the third concept – Buy Time. If you missed the first two themes, click the links below.

  1. Buy Experiences
  2. Make It a Treat
  3. Buy Time
  4. Pay Now, Consume Later
  5. Invest in Others


Buy Time

By now, you’ve probably heard that you should use your money to buy experiences rather than stuff to improve the joy you get from spending. But experiences take time. If your days are full of commuting and working then there’s not much time left for anything else. No wonder so many of us default to spending our money on stuff and trying to relax by watching TV. The internet has made it easy to buy practically anything we want in a few clicks and to watch limitless amounts of TV series, movies, and Fail videos. Yet these activities are likely counterproductive to improving our happiness and sense of well-being.

Once our basic needs are met, time is our most valuable asset. Time to do the activities we enjoy. Time to exercise. Time to be with friends and family. The authors reviewed happiness research and listed some of the most and least pleasant ways we spend our time as shown in the chart below:

Rarely Unpleasant Rarely Pleasant
  • Exercise
  • Reading
  • Praying
  • Having sex
  • Working
  • Commuting
  • Shopping
  • Doing housework

Consider Ben, who drives 45 minutes to work, plugs away at his desk all day, and then drives 45 minutes back home (an hour if he hits traffic). By the time he and his spouse  (who also works full-time) make and clean up dinner and get the kids in bed, he is exhausted and plops down on the couch to watch TV. An hour or two later, he goes to bed without having been active all day. Rinse and repeat the rest of the week.

Now look back at the Rarely Pleasant list above. Ben spends most of his days doing unpleasant things. But he has a big house, nice car, and family to help support. What’s a guy to do?

For starters, he could find a new job or move closer to work. Commuting is one of the least pleasant ways to spend time. If you commute, you not only spend that time in a bad mood but also cannot use it on something more fulfilling like going biking with your kids or meeting a friend for coffee or hitting the gym. Commuters report less job and free-time satisfaction than non-commuters. Ben may have to take a pay cut to move closer to home, but he could use that additional time in ways that generally improve happiness such as exercise, volunteering, and socializing. The authors of Happy Money point out that the average American worker works two hours of every day just to pay for their cars. Yikes!

Next, Ben could turn off his TV. The average American watches two months of television per year according to Happy Money. Wow! While an occasional show can be beneficial, too much TV leads to decreased happiness. By limiting his TV viewing, Ben will get back 5-10 hours per week to spend on activities that will have a positive effect on his satisfaction with life.

Now that we have Ben all squared away and happy, what else can we do to benefit from the “buy time” principle? Learn to ask ourselves how our spending choices will affect our time. Here are some examples:

  • How will this new pair of shoes affect my time next Tuesday?
  • Will buying a Ultra HD 4K TV compel me to watch more TV?
  • Will accepting this new job offer give me more or less spare time?

The authors state, “By consistently asking yourself how a purchase will affect your time, your dominant mind-set should shift, pushing you toward happier choices.”

What are some of the ways you have bought time for yourself? How did you use it?

Happy Money – Buy Experiences

I am fascinated by research on the relationship between money and happiness. So I was excited to read the recent book, Happy Money by Elizabeth Dunn & Michael Norton. The authors combed and summarized research on the ways money can buy happiness, and offer the following five principles.

  1. Buy Experiences
  2. Make It a Treat
  3. Buy Time
  4. Pay Now, Consume Later
  5. Invest in Others

There is no substitute for reading the book, but I plan to summarize each principle for those who would like a taste. I’ll start with the first principle: Buy Experiences.

Buy Experiences

The gist of this principle is that you will get more happiness for your dollar by buying experiences instead of stuff. While I was already aware of this general concept, Happy Money provided more color and additional insights such as:

  • palm treesMoving to a nicer and bigger home will not necessarily make you happier. After some time passes, you may report being happier with your house, but not with your overall life. As the authors point out, “buying a house often isn’t a good investment in our happiness”.
  • People who spend more of their income on leisure activities report higher life satisfaction.
  • Part of the reason experiences trump stuff is that experiences tend to connect us with other people.
  • People more often define themselves by their experiences (e.g. completed triathlon, trip to the Galápagos Islands) than by their material possessions.
  • You’ll get the most bang for your experience buck if: 1) the experience provides social connection, 2) gives you a story to tell for years, 3) is tied to your sense of self, and 4) is unique.
  • The pleasure we derive from material goods fade over time as we become acclimated to them but experiences tend to get better with time.

This post is for educational purposes only and should not be construed as advice specific to your situation. You should consult a legal, accounting, or investment professional before deciding the appropriate course of action for you.

Have You Considered Eating Less?

“Have you considered eating less?”

A blunt doctor recently asked a friend of mine this question. (Really, it wasn’t me!)

Apparently the doctor inquired in a tone that was neither judgmental nor rude, which is no small feat. Although his question ignored the fact that there are many reasons people are overweight, there was something refreshing about its straightforwardness and simplicity.

My friend’s experience got me thinking about the parallels between overeating and overspending.

Most of us mere mortals have to be thoughtful about what we are eating if we want to lose weight. Similarly, we need to be mindful of our spending if we want to reduce our debts or save more.

Dare I ask: Have you considered spending less?

Buying Cars and Annuities

What do buying annuities and buying cars have to do with each other? Not much actually, but I’ve recently responded to questions about each on the new personal finance website, Dimespring.com. Check out my answers at the links below:

How much should I save before buying a car?

Is a variable annuity right for me?


Skimmers, Jitters, and Complaints

Below are the interesting personal finance links I have come across since my last post:

Ideas and Links from the NAPFA Conference

I attended the national conference for the National Association of Personal Financial Advisors (NAPFA) in Chicago this week. NAPFA is a professional organization for financial advisors who are committed to Fee-Only and comprehensive financial planning. Below are some of the new ideas and time-tested reminders that I took away from the conference.

Estate Planning

  • If you are the parent of a minor and you do not have a Will, a court will determine his or her guardian. Please prioritize putting a Will in place if you are in this boat.
  • You may need to appoint a short-term guardian in your Will if the primary guardian for your minor child does not live nearby. This will prevent your child from ending up in the care of an agency until your primary guardian arrives.
  • A presenter recommended the book Who Gets Grandma’s Yellow Pie Plate for help in determining how to divide assets in your estate plan.
  • Use an attorney who specializes in estate planning to draft your estate planning documents. You wouldn’t let your general practitioner perform brain surgery on you, so don’t let your real estate attorney draft your estate planning documents.
  • Visit www.martindale.com and www.actec.org to find attorneys in your area who specialize in estate planning.
  • Use this checklist provided by the American Bar Association to think through decisions you will need to make in your medical directives.

Property Division in Divorce

Debt Management

Healthcare Reform

College Education Savings

  • A speaker, Jean Chatzky, recommended paying for college education in thirds: 1/3 from savings, 1/3 from cash flow while your child is in college, and 1/3 from student loans taken by the student. She feels that this approach allows the student to have some skin in the game. Research has shown that students who pay for part of their tuition take college more seriously.
  • In 2011, all colleges that participate in Title IV student financial aid programs will required to have net price calculators on their websites.

Please note that this blog post is for educational purposes only and should not be construed as advice specific to your situation. You should get advice from a legal, accounting, or investment professional before deciding what course of action is appropriate for you.