Meet Tina, one of our beloved Financial Counselors here at BCS!
Those who have the pleasure of meeting with her probably have learned that she is an avid reader (and writer!). As such, she has read tons of books on the subject of financial literacy and has graciously agreed to share her wealth of knowledge about these resources with us.
Each quarter we will share the latest reads so you can check them out at your local library to further your own education on finances. These are books that we do recommend but will also be including affiliate links so that should you choose to purchase them, Birch will receive a small portion of that purchase.
To kick things off we are going to start with a review of a great read, “Happy Money: The Science of Happier Spending” by Elizabeth Dunn and Michael Norton.
Tina’s Top Picks – SPRING 2023
I really love this book!
The authors walk you through the science behind measuring happiness as related to how you use money. The five methods of using money that provide the greatest personal happiness are:
1. Making the spending a treat (vs doing it every day. For example, if you splurge on coffee once per week, you’ll enjoy that coffee so much more than if you do it every day. The law of diminishing returns applies when treats become ubiquitous, and then the money is essentially wasted. To quote from the book, Abundance, it turns out, is the enemy of appreciation.)
2. Buy experiences rather than stuff. Stuff loses its lustre really fast (this includes new cars!). Experiences cross time dimensions (past, when you plan the experience; present, while you’re enjoying the experience; and future, when you have memories of the experiences) so they basically triple the bang for your buck.
3. Buy time. In essence, use money to free up time that you can then use in ways you enjoy more. Ask, “How will this purchase change the way I use my time?” If that purchase will require that you spend even more time in a way you don’t enjoy (here’s looking at you, exercise bike)–reconsider! If that expense represents a good intention you’re not likely to follow through on, you won’t gain any happiness from it.
4. Pay now, consume later. Separating the pain of payment, and doing it ahead of time, makes the pleasure of consumption later all that much sweeter. This is the opposite of putting something on your credit card so that you enjoy the pleasure of that thing/event now but have to pay for it later. It’ll hurt worse later when all the enjoyment has worn off but you’re still making those monthly payments.
5. Invest in others. Sharing your money with others, whether by buying them things or experiences or just donating money to be used for a good cause has an exponential effect on your own happiness. Don’t forget that if you pair your time and attention (and maybe effort) with the money given to help another, you’ll reap even more enjoyment. The more involved you are, the greater the happiness.
A cool result of this research is that you can see how happiness can be enhanced even more by combining principles. For example, if you take your friend out for coffee once every year for their birthday, you’ve applied principles 1, 2 and 5 all at the same time for an occasion that you’ll look back on with fond memories and tremendous satisfaction. Even better if you can somehow pay for that coffee out of your next paycheck so it feels “free” when you show up with your friend on their birthday.
Watch for more great reads from Tina every few months here on The Birch Blog!