This is the time of year when we’re tempted to go a little nuts with our spending. You want to get something really special for everyone you love. You feel like it’s the perfect time to splurge on that fancy meal with friends, that extra bottle of wine or that party dress you’ve been looking for an excuse to buy. But if you’re planning on putting that bill on your credit card, then think again. A recent story by Tracy Sherlock in the Vancouver Sun – When it comes to making ourselves happy, it’s better to give – examines recent research that says debt, particularly credit card debt, is a real drain on happiness.
According to Elizabeth Dunn, associate professor of psychology at UBC, there’s a stronger connection between happiness and paying off your bills than between happiness and money. So having a better sense of control over what money you do have is more important than the amount of money you have. And when it comes to debt, not even generous savings will save you: Dunn says that bad feelings about any debt you have far outweigh any good feelings about any assets you’ve accumulated. In other words, making little money but living within your means can make you happier than taking home a big salary and racking up huge amounts of debt.
So when it comes to the holidays, ask yourself what you can reasonably afford. You might think, when you wander through the shops looking at all the glittery things, that what would really make you happy is to just fork over your credit card and pick out the most appealing things. But think again: research shows you’ll be a lot happier in the long run if you live within your means.