An adage goes, "Money can't buy happiness," but people usually mean, "Material goods can't buy happiness." Spending time with the wife and kids on a camping getaway costs money, but it's the kind of spending that is worthwhile and fulfilling. At least, that's the conventional wisdom.
"Most people think materialism is not a good thing," says Joseph K. Goodman, an assistant professor of marketing at the Olin Business School at Washington University in St. Louis and one of the authors of the study. "They think you're not going to get happiness through possessions." The flip side to material spending is experiential spending, or spending on experiences such as the camping example. Goodman says the prevailing view among psychologists has long been that, for each dollar spent, experiential purchases tend to be "better" purchases than material ones. People can more easily forget about the bad things from an experience and focus on the positive. Being positive isn't so easy with material spending. "It's easier to fudge the size of the fish you caught than to fudge your feelings about the couch you see every day," Goodman says. But when Goodman put these feelings to the test, he found that the intuitive bias against possessions didn't always pan out. Sometimes, being materialistic really can make you happier.
So, money can make you happy.