“How to Spend Money and Still Be Happy”
When asking someone how to spend money to find happiness, there’s usually no standard answer. But if you flip the question to “how to spend money and definitely be unhappy,” the answer becomes much clearer.
This is what American financial writer Morgan Housel discussed in his 2025 book “The Art of Spending Money,” which was translated into Chinese as “花錢的藝術” and published in Taiwan this July. Housel, known for his bestseller “The Psychology of Money,” shifted his focus from “how to earn and save” to “how to spend.”
He borrowed the mindset of investor Charlie Munger: Munger once gave advice on lifetime success to a boy, all of which were about “what not to do.” Housel believes that spending money is similar – he can’t tell everyone how to spend money because everyone is different, but ways of spending money that lead to unhappiness are often universal. So he compiled a reverse list titled “How to Spend Money and Be Miserable.”
This list contains nearly twenty items, with some concepts that resonate most with ordinary families, as evidenced by several financial surveys conducted in the US this year.
One item on Housel’s list is fixating on people one tier above oneself, believing that reaching that tier will bring lasting happiness. He reminds readers that often, where they are now is the life they once dreamed of a few years ago.
He also points out that when spending outpaces income, life may seem to be improving externally but internally, there may be no sense of progression. This psychological phenomenon is not uncommon in many Chinese family gatherings: discussions revolve around where children go to school, which school districts they live in, what cars they drive, easily becoming topics for comparison, with someone always further ahead.
Data also supports this. A financial evaluation platform, Savology, released the “2026 Family Financial Health Report” in August, analyzing the financial check-up results of 58,406 families. It revealed that retirement readiness follows a “U-shaped curve”: the proportion of families with incomes over $250,000 scoring lower than C in retirement readiness is nearly the same as those with incomes below $50,000.
High income does not equal preparedness. As income rises, so do expenses and expectations.
One item on Housel’s list is sacrificing independence for status. We often use others’ mansions, luxury cars, and social media posts as evidence that “this person is wealthy and living well,” wanting to prove the same.
This idea was previously discussed by Housel in his 2018 essay “The Psychology of Money.” Working as a valet in a Los Angeles hotel, he initially thought that clients driving Ferraris were all wealthy, only to realize that many of them spent most of their money on cars. His conclusion was that true wealth lies in the money one saves and keeps in the account, invisible to others.
Another cost of maintaining appearances is having no financial cushion. A report by the Federal Reserve in May 2025 showed that 73% of adults felt their financial situation was “acceptable” or “comfortable.” However, when faced with a $400 unexpected expense, only 63% could cover it in cash or its equivalent.
In other words, over one-third of American adults would struggle to pay a $400 unexpected expense in cash alone. Looking comfortable and having true financial freedom are two different things.
Housel does not advocate for extreme frugality. He also warns against the other extreme: seeing money as the root of all evil or being so frugal that one denies themselves even simple pleasures they can afford. Money sitting idly in an account loses its purpose as a tool.
For example, many elders hesitate to spend money on plane tickets to visit family or to have a nice meal together but choose to save instead. These expenses may not yield high returns financially, but the memories they bring are invaluable.
For many thrifty families, this particular item is worth considering. Saving money is intended to make life more stable and free; the number in the account is not the end goal.
Housel’s sharp reminder is not to trade what one truly needs for things they don’t. Often, the most sacrificed items are family time, health, and sleep in exchange for a little more income or something that quickly loses its allure.
For households with children, “needs” also encompass securing some uncommon safeguards. The same report by Savology found that estate planning was the only subject that received a failing grade among seven categories, averaging only a D+;
More than half of families (53.3%) had none of the seven basic estate planning documents. Among 28,500 families with children, 88.1% had not designated guardians.
In his book, Housel writes, “Independence is the highest-return investment money can buy.” The ability to manage time on one’s own terms, living without having to cater to others, is often more valuable than any visible possession.
The purpose of this “miserable list” is not to dictate how everyone should spend money but to eliminate ways that almost certainly lead to regret. This leaves space for each family to explore what truly improves their lives.