Telling yourself money won’t buy you happiness may make you feel better when you’re broke. But you know what would really help? More money. Then you could blow it on whatever makes you smile.
That’s according to a new study from Cambridge University, in which U.K. researchers teamed up with a local bank to analyze how personality affects people’s spending. The study analyzed 76,863 transactions from 625 participants who took a personality test and whose purchases were anonymously matched with their responses.
Researchers matched participants’ transactions with five personality traits: openness to experience (artistic vs. traditional); conscientiousness (self-controlled vs. easygoing); extroversion (outgoing vs. reserved); agreeableness (compassionate vs. competitive) and neuroticism (prone to stress vs. stable). Going out to bars qualified as an easygoing, extroverted activity, so those who spent more money at bars were considered more social.
“Historically, studies had found a weak relationship between money and overall well-being,” Joe Gladstone, a research associate at Cambridge Judge Business School, said in the press release. “Our study breaks new ground by mining actual bank transaction data and demonstrating that spending can increase our happiness when it is spent on goods and services that fit our personalities and so meet our psychological needs.” Put another way: money indeed does buy happiness.
In fact, the researchers called this a cause-and-effect relationship in a second experiment, in which people were given vouchers to spend at a book store or bar. Extroverts forced to spend time at a bar reported being happier than introverts who did the same, while those introverts forced to hang out in a book store enjoyed the experience more than the extroverts.
So forget the old adage if it makes you feel better. But remember, spending hundreds of dollars on your dog — something a highly compassionate person would do — may give you the the warm fuzzies (pun intended), but the joy of pampering your pet won’t outweigh the importance of your other financial goals.
Dealing with debt can be incredibly stressful and you could make it much harder on yourself by focusing limited resources on things you don’t need. In the end, it’s all about balance. If traveling makes you happy, a vacation may be worthwhile. But if that leads you to max out your credit cards, trash your credit score and leave you paying off debt the next few years, you’ll probably wind up feeling miserable. You can check your credit scores for free every month on Credit.com to make sure your quest for happiness isn’t getting out of control.
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