Can money really buy happiness?

Money can't buy happiness. We all know what it means — that true happiness comes from things that can't be found in any store, like love, friendship, and gratitude. But new research shows that, contrary to that common wisdom, money can buy you happiness — if you know where to spend it.

The golden rule: Devote your dollars to things that further your goals and beliefs, says Leaf Van Boven, Ph.D., an associate professor of psychology and neuroscience at the University of Colorado at Boulder. It's now very clear that nurturing the things that you value — whether that's becoming more cultured or redesigning your garden — is what makes people happier. It's not that material goods are perpetually disappointing, he adds. But when you're intent on acquiring them, you tend to compare your possessions to other people's. As a result, you gain only the feeling of wanting more. Purchases that support your own values, however, are more satisfying because they help to boost your feelings of self-worth.

1. Load Up on Your Memory Bank
One of the best ways to invest in happiness is to focus on doing rather than owning.

2. Splurge on Mini-Treats
It may sound counterintuitive, but researchers have found that over time, small, inexpensive indulgences have virtually the same emotional impact as big, pricey ones — making the little things a much better buy.

3. Get a Lift from Giving
Our stores of happiness are stockpiled higher when we spend money on other people, says Michael Norton, Ph.D., an assistant professor of business administration at Harvard Business School. Giving to people you know may result in the biggest emotional boost.