The Art of Spending Money: Simple Choices for a Richer Life

Housel claims that true happiness comes not from the contrast between what one has and what one previously experienced or expected. He opens with the story of Michael May, who regained his sight at age 46 after lifelong blindness and experienced intense joy upon viewing the ordinary carpet in the doctor’s office. This example establishes Housel’s argument that happiness emerges from the gap between expectations and reality, not from one’s objective circumstances. The carpet itself may be unremarkable, but May’s sudden ability to perceive it was a source of authentic delight that had nothing to do with what he was looking at.

Similarly, Housel contends that people feel richest when they are undergoing a dramatic transition from scarcity to sufficiency. By contrast, a shift from extreme wealth to even greater wealth does not provide an intensely positive emotional impact. This observation reflects broader research in hedonic adaptation, a psychological phenomenon that was studied extensively since the 1970s. This stance holds that people adjust to improved circumstances and quickly return to baseline happiness levels.

However, this chapter presents a counterintuitive strategy, as Housel states that maintaining a simple baseline lifestyle amplifies the joy of occasional luxuries. Housel draws on Arnold Schwarzenegger’s diet philosophy (the contention that eating mostly healthy food makes occasional indulgences more satisfying); he then applies this idea to financial decisions.