In a world where success is often measured by wealth and possessions, it might feel counterintuitive to claim that happiness doesn’t lie in how much we earn or own. Yet, page after page of psychological research tells us something surprisingly liberating: we can be happier with less, and the key lies in embracing the ancient virtue of thrift.

At first glance, thrift may sound like a dusty concept—synonymous with stinginess or being miserly. But the root of the word “thrift” is actually “thrive.” Thrift is about using our limited resources—especially money—efficiently and intentionally, not only to survive but to flourish. It’s about choosing fulfillment over excess.

Despite the reality that financial hardship can impact our well-being, its influence on our happiness is not as profound as we might expect. We now know that our happiness is shaped far more by how we live than by what we have. And that’s great news, especially in a world plagued by debt, rising living costs, and economic uncertainty.

In fact, empirical evidence shows that people can indeed be happy with less. Research by psychologist Sonja Lyubomirsky and her colleagues, including graduate student Joe Chancellor, proposes that by adopting thrift and using money more wisely, even individuals with modest means can extract maximum happiness from life.

Thrift has long been linked to values like industry, temperance, and meaningful activity. It’s been championed by thinkers across cultures and centuries—from Confucius to Benjamin Franklin to Warren Buffett. The principle is simple: spend less, but live more fully.

How? Start by spending money on experiences rather than possessions. Countless studies confirm that experiences bring more lasting happiness than material goods. Why? Because experiences grow richer in memory, are harder to compare with others’, are more social, and become part of who we are. A vacation, a concert, or even a family picnic lingers far longer in our hearts than the thrill of a new phone or handbag.

Possessions, on the other hand, fade quickly. We adapt to them. A new purchase brings a rush of joy that soon levels off, especially as we begin comparing what we have to what others own. Experiences, in contrast, become stories we share, memories we cherish, and parts of our identity we hold onto.

Not only should we favor experiences over things, but research also advises spreading out our spending on small pleasures instead of splurging on big-ticket items. Think several cups of your favorite coffee or recurring cozy dinners instead of one extravagant blowout. We get more joy by savoring frequent little treats than from a single large indulgence. Even simple joys—a bouquet of flowers, a walk in the park, or a phone call with a friend—can compound into significant life satisfaction when they happen regularly.

Another surprisingly effective strategy is to “recycle happiness.” Instead of chasing novelty through constant consumption, we can find joy in what we already own. We can rewatch old movies, reread beloved books, repurpose items, or simply reminisce more mindfully. By being present with our memories, savoring what we already have, and using our possessions creatively, we stretch their value and extend our happiness.

Renting is also a powerful, yet overlooked, tool for happiness. While conventional wisdom often promotes ownership—especially of homes—as the path to security and joy, research suggests otherwise. In reality, homeowners report more stress, more housework, and less social connection compared to renters. Renting can allow us greater flexibility, variety, and access to experiences without the burden of ownership and its hidden costs.

The takeaway? Lasting happiness isn’t about piling up possessions. It’s about how we use our money, time, and attention. By spending on experiences, valuing the little joys, recycling what we already have, and even renting when possible, we unlock the freedom to live more with less. In doing so, we don’t just stretch our dollars—we stretch our moments of joy, meaning, and connection.

Adapted from insights in “The Myths of Happiness” by Sonja Lyubomirsky.