For many people the start of a new year is a chance to re-focus on things that are important to them, whether it is health, relationships or finances, a turning of the calendar means a fresh start. So as we prepare for a New Year, I wanted to share a personal story that challenges the old adage “money can’t buy happiness.”
Several months ago, my wife and I decided to replace our shower curtain with a shower door and at the same time, I happened to stumble across some research published by my old employer, the National Academy of Sciences. In the study, two researchers gave people $40 to spend on two consecutive weekends. The first weekend the participants were told to spend it on a time-saving task (for example, paying someone to clean their home or mow the yard) and the second weekend they were instructed to spend the $40 on a material item, anything they wanted. Participants reported feeling a higher “positive emotion” at the end of the days in which they spent the money on a time-saving task as opposed to a material item.
So what does any of this have to do with my shower door? When I got quotes to buy and install the door I immediately went into “man mode” and said there’s no way I’m paying somebody to install this door, I can do it myself. Fortunately, my wife talked me into letting a professional install the door and as normally is the case, she was right. It was so nice coming home to a new shower door already installed, which meant I got to spend quality time with my family in the evening.
Behavioral science is a particular area of interest for me, so I immediately thought to myself, why are we so quick to spend $1,100 on the new Apple iPhone, but feel guilty if we spend a few hundred dollars for someone to install a shower door? This study would argue that you would get much more happiness by paying someone to install a shower door and in essence, “buy time”, for yourself rather than spending money on an iPhone that our American consumerism will tell us is out of date by the time we get it home.
At Stewardship Advisors, LLC we often say that we try to help people strike a balance of living for today and saving for tomorrow. So as you plan your year, remember that a good financial plan might help you find places to “buy time” and spend your new-found time doing the things that are important to you.