Wednesday, May 04, 2011

Saving Up And Paying Cash Makes You Happier

The Wall Street Journal has an article out on 8 ways to buy more happiness. One of the way, happily, coincides with Dave Ramsey's take on credit cards.
Credit cards, car loans and even mortgages allow people to consume now and pay later. The price is interest -- and mounting debt for the incautious -- so there's a financial argument to be made for saving up and paying cash whenever possible. But there's a happiness argument, too. Consumers who buy right away on credit rob themselves of a free source of enjoyment: anticipation ... Delayed pleasures are just as intense, and consumers accrue additional pleasure by looking forward to them. Think of it as "compound happiness" interest.
I can remember the delightful anticipation in my youth when I saved up to buy games or fish and plants for my aquariums. Unable to buy on credit, I was always longing, in a pleasant way, for another fish tank so I could breed my fish, sell them and use that money for other things. In retrospect, having to save up for things didn't just give me happiness from looking forward to my purchase, it made me more creative as I found new ways to get to my goals quicker.

Excitement unbounded! Well, for me, at least.

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