The living costs crisis shows no signs of letting up. Inflation all over the world keeps rising and economists are predicting numerous countries will go into recession.
With households having less to invest, they have to prioritise, and stark choices have to be made. For many, these decisions are extreme.
But even anyone who has their basic needs covered continue to be faced with having less money to invest now than they did a year ago. And whether it's cancelling a streaming service or reducing grocery treats, a lot of us will be deciding what we should are able to afford to help keep and what we ought to do without within the coming months.
Research shows that the way we spend what money we all do have may have a marked effect on our happiness and wellbeing. There's evidence, for example, that purchases which help us to gain autonomy (a bicycle, say) or improve our self-esteem (a confidence boosting outfit perhaps) may have a positive effect.
Here are some of the different ways that research has shown how spending cash and wellbeing are linked.
1. Connecting with others
Research claim that investing in social experiences, such as going for coffee with friends, or attending a concert or festival, boosts our wellbeing. The same goes for spending money on others, whether it's buying someone a gift or making a donation to charity.
This is because sharing experiences with other people and following through towards positive change fulfils our basic psychological needs of social connection and fulfilment.
Of course, such experiences don't have to cost anything. Taking a walk, joining a running group, or volunteering can be done for free.
2. Buying time
Other research suggests that wealth should not be measured solely in terms of economic resources, for example property or cash, but also with the amount of free time you've. Insufficient time, referred to as “time poverty”, has been consistently linked to increased stress, and poor lifestyle choices.
Spending money on services or products which free up time – for example assist with domestic chores or avoiding an extended commute to work – can be viewed as a sensible investment.
3. Achieving potential
Feeling competent at what we should do and developing our potential will also be key ingredients for improving happiness levels. Research suggests that spending money on things or experiences which help you to definitely feel better at stuff you enjoy, or that improve your self-esteem are worthwhile.
This might include evening classes or training courses that develop skills, or items that could improve the way we do activities we enjoy, such as technology or sports gear.
But again, learning new things doesn't have to cost much whatsoever. Various platforms and social media channels can offer top quality free courses and “how to” guides.
4. Impressing less
Research has shown that buying things specifically to thrill others doesn't give you happiness. Actually, an emphasis on materialism, the buildup of wealth and possessions to signal social status, can have a detrimental impact on wellbeing.
This is because seeking external rewards through other's admiration and compliments comes with no guarantees. Instead, seeking personal fulfilment through consumption will probably distract you from investing money and time on nurturing your social connections or on self-development which will actually have a positive impact on your quality of life.
So stepping from the objective of wanting more income to buy more things might be probably the most positive things you can do when there's a cost of living crisis. Or, for that matter, even if there is not.
This article is republished from The Conversation. Read the original article.
