Prosocial spending and buying time: Money as a tool for increasing subjective well-being

Researchers have long been interested in the relationship between income and happiness, but a newer wave of work suggests that how people use their money also matters. We discuss the three primary areas in which psychologists have explored the relationship between spending decisions and subjective well-being, beginning with a brief review of seminal research on the benefits of buying experiences. We then offer an in-depth review of two other domains in which changes in spending decisions have been shown to increase well-being: using money to benefit others (prosocial spending) and giving up money to have more time (buying time). We discuss how, when, and why prosocial spending and buying time promote happiness. In doing so, we critically consider the evidentiary value of past findings (particularly our own) and provide links to all of our available data, as well as practical recommendations about how to replicate our findings (e.g., which measures and manipulations produce the most consistent results). Taken together, our studies on prosocial spending and buying time underscore the value of conceptualizing money not only as a stable life circumstance, but also as a tool that individuals can intentionally utilize to alter their own happiness levels.