How we spend?

I pulled this blog entry up from Jonah Lehrer's blog - Frontal Cortex. Before I let you enjoy the read, maybe an update here would be good.

I have been being rather good about sending to my other bank account the full 10% of my paycheck. Currently, I'm paid weekly. So each week for a total of three whole weeks I've been sending in my moola. This week, the last week of the month, I turned around and spent it all. I don't feel bad. I got my truck registered in the state of Washington. I was able to get the emissions test and the the car registered and plates on the vehicle before they expired from Wisconsin. I know for a fact I just saved a ton o' money for citations that can't be written. I know for a fact I just saved a ton o' nervous energy too.

I feel good about how I spent my savings. I know, I know...I get to start all over with the savings thing. But, this was totally cool. I had the cash to take care of business. I'm looking forward to sending into savings another 10%. It's true I can barely afford my bills by keeping this 10%. But, when I do actually send it into savings I'm finding that I make do on what is left. This hurts a whole lot less than I thought it would.

I leave you with Jonah...He makes some truly heartwarming points.

Money and Happiness (http://scienceblogs.com/cortex/2009/08/money_and_happiness_1.php)
Posted on: August 27, 2009 11:52 AM, by Jonah Lehrer
Drake Bennett has an interesting and nuanced article in the Boston Globe Ideas section on money and happiness. To make a long story short, money can buy us some happiness, but only if we spend our money properly. Instead of buying things, we should buy memories:
A few researchers are looking again at whether happiness can be bought, and they are discovering that quite possibly it can - it's just that some strategies are a lot better than others. Taking a friend to lunch, it turns out, makes us happier than buying a new outfit. Splurging on a vacation makes us happy in a way that splurging on a car may not.
"Just because money doesn't buy happiness doesn't mean money cannot buy happiness," says Elizabeth Dunn, a social psychologist and assistant professor at the University of British Columbia. "People just might be using it wrong."
Dunn and others are beginning to offer an intriguing explanation for the poor wealth-to-happiness exchange rate: The problem isn't money, it's us. For deep-seated psychological reasons, when it comes to spending money, we tend to value goods over experiences, ourselves over others, things over people. When it comes to happiness, none of these decisions are right: The spending that make us happy, it turns out, is often spending where the money vanishes and leaves something ineffable in its place.
Any attempt to put these findings into practice, however, has to contend with the subtle but powerful ways money itself channels our thinking, and the ways it plays on human attitudes about sharing and scarcity. Recent studies have suggested that merely thinking about money makes us more solitary and selfish, and steers us away from the spending that promises to make us happiest.
Why don't things make us happy? The answer, I think, has to do with a fundamental feature of neurons: habituation. When sensory cells are exposed to the same stimulus over and over again, they quickly get bored and stop firing. (That, for instance, is why you don't feel your underwear.) This makes sense: the brain is an efficient organ, most interested in the novel and new. If we paid attention to everything, we'd quickly be overwhelmed by the intensity of reality. Unfortunately, the same logic applies to material objects. When you buy a shiny new Rolex watch, that watch might make you happy for a few days, or maybe even a week. Before long, however, that expensive piece of jewelery becomes just another shiny metal object - your pleasure neurons have habituated to the luxury good. (Of course, your Rolex can become a problem for everybody else, since it raises the material expectations of all those poor souls wearing less expensive watches. These people now feel inferior, since their Timex has been devalued by the costlier item. [Such luxury items are known as "positional goods," since part of their appeal is that they signal your social position.] Multiply this same psychological phenomenon across a full range of consumer products - from clothes to cars, stereos to shoes - and you can begin to see the "hedonic treadmill" that afflicts people in developed countries. Not only do their brain cells automatically adapt to their state of wealth, but those same neurons are constantly being bombarded with a new set of expensive expectations. Of course, not everybody can afford a Rolex or a Lexus, which means that we are constantly being disappointed.)
That, in a nutshell, is why material possessions don't make us happy. As Bennett points out, however, investing in pleasant experiences is a much better alternative:
Money spent on experiences - vacations or theater tickets or meals out - makes you happier than money spent on material goods. Leaf Van Boven, an associate psychology professor at the University of Colorado, and Thomas Gilovich, chair of the psychology department at Cornell University, have run surveys asking people about past purchases and how happy they made them.
"We generally found very consistent evidence that experiences made people happier than material possessions they had invested in," says Van Boven.
Why? For one thing, Van Boven and Gilovich argue, experiences are inherently more social - when we vacation or eat out or go to the movies it's usually with other people, and we're liable also to relive the experience when we see those people again. And past experiences can work as a sort of social adhesive even with people who didn't participate with us, providing stories and conversational fodder in a way that a new watch or speedboat rarely can.
In addition, other work by Van Boven suggests that experiences don't usually trigger the same sort of pernicious comparisons that material possessions do. We like our car less whenever we catch a glimpse of our neighbor's newer, nicer car, but we don't like our honeymoon any less because our neighbor went on a fancier one.
Another virtue of experiences is that, while material things get diminished over time (we habituate to the pleasure, and then have to deal with the inevitable repairs), pleasant memories tend to become more pleasant. We forget about the delayed flights and jet lag but remember the lush rainforest hike, or the fancy meal in Paris. The vacation might be long gone but it's still making us happy.