Money doesn't make us happy but experiences do

Money is an emotional issue, especially during economic hard times. Social scientists have always warned that once a person's basic needs are met money doesn't buy happiness. But if you're wondering, or maybe even arguing over, what to do with any precious discretionary income these days, a new study suggests how to get the biggest emotional bang for your buck.

Ryan Howell, an assistant professor of psychology at San Francisco State University, found that buying experiences -- such as vacations, going to the theater or renting a sailboat -- gave people more happiness than buying material things. The study, of 154 people ages 19 to 50, showed that experiences increase happiness because they are often social in nature. In addition, however, experiences tend to make people feel more alive. "People report a sense of feeling invigorated or inspired," Howell said in an interview. Experiences may also yield more happiness because people are left with positive memories, a sort of return on their investment.

"It's not that material things don't bring any happiness. It's just that they don't bring as much," Howell said. "You're happy with a new television set. But you're thrilled with a vacation."

The study may yield some lessons for Americans in despair over the recession. "For whatever you can afford, you'll maximize your happiness, and the happiness of others around you, if you spend it on a life experience," he said. It doesn't matter how much money you spend, either. "Whether you spent a little or a lot on the life experience, you still have the same level of happiness," he said.

The study was presented today at an annual meeting of the Society for Personality and Social Psychology and will be published later this year in the Journal of Positive Psychology.

-- Shari Roan