College Connect: What should I be spending on?

Posted By David Wilhite

By Garrett Michael

Lilley Cushman, a sophomore Biology major at the University of Georgia, said she has trouble deciding what to spend money on, while still growing a healthy savings account.

She can cover most of her basic needs, like food, a place to live, and school tuition, but said she struggles to decide what to purchase when it comes to her wants.

“I try my best to save on all of the little things, but I still feel like there is money out there that I could still be saving,” she explained

Cushman is probably right, according to Matt Goren, who teaches personal finance at UGA. There are areas where she could save more money.

Goren, who also hosts a radio show which can be heard at, teaches his students to apply what is known as the Hedonic Treadmill when they are weighing the cost and benefits of a purchase. The Hedonic Treadmill principle holds that, while an individual’s happiness levels may vary, overall happiness usually returns to a stable baseline. There are exceptions for monumental events, but most of the time, highs and lows both return to that established baseline.

Goren explained it like this: “If you go get the bigger car, the bigger apartment, cable TV, all that stuff, we think this is going to make us happier forever. But it doesn’t. It only makes us happy in the short term, and we come back down. So even though our happiness levels have come back down, our expenses remain high.”

Essentially, before deciding to buy an expensive item that will continually require payments over a long period of time, consider that it likely will not provide happiness six months down the road. Goren said research shows many of the things people are buying today, particularly in the middle class, do not actually make them happy in the long term.

What kind of difference in spending money will you see if you understand the concept of the Hedonic Treadmill? According to Goren, huge amounts of money can be saved simply by cutting back on large unnecessary expenditures.

“When someone tells me ‘Don’t go drink that cup of coffee for three dollars!’ I think it’s ridiculous. Move out of your [expensive] apartment and go live in something smaller. Sell your car that you only use twice a week. That’s what people should be doing with their expenses,” Goren said passionately.

What should I be spending on? To answer Cushman’s question, Goren’s advice is not so much about saving by cutting out the small pleasures of life, but rather eliminate the expensive products and services that do not make us happy in the long run.

Garrett Michael is a journalism major at the University of Georgia’s Grady College of Journalism and Mass Communication.

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