Cheapskate Wisdom from … Economist George Loewenstein

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“People are notoriously bad at figuring out what to do with their money.”

The Carnegie Mellon economist is quoted in “Live Well With What You Have,” a Parade mag story about how the recession has forced people to spend less—and that many families are happier because of it. Why? Mostly because they’re spending more time together, and because they’ve come to a deeper understanding of what’s really important in life.

Examples of how some people use their money in bad ways?

They’ll buy a flashy car when a small one would do or a big house that’s far from town without considering how isolated they might feel. Of course, they believe they’re investing in happiness.

What such spending can instead bring you is more problems. But hey, it’s nothing that a little more money couldn’t solve, right?

Higher Incomes, Less Happiness

On Second Thought, Perhaps Money Can Make You Happy