Luxuries Don’t Guarantee Happiness

Oct, 2023

Introduction

How often do you treat yourself to luxuries?

Do you think you are more sensible with your money or more irresponsible?

 

Vocabulary list 

• Students read each word followed by the definition, focusing on the correct pronunciation.

• The teacher reads the sample sentence and the students repeat, focusing on the correct pronunciation.

• After reading the list, students try to make their own example sentences using the words that are new to them. 

• Students share their example sentences and the teacher gives feedback, correcting errors if necessary.

conventional (adjective)

kənˈven.ʃən.əl

typical and ordinary

I have a conventional office job where I mainly do administrative work.

 

rationally (adverb)

ˈræʃ.ən.əl.i

in a way that is based on reason and clear thought, rather than emotions

If you think about the problem rationally you will find a solution.

 

unpredictable (noun)

ˌʌn.prɪˈdɪk.tə.bəl

likely to change without reason

Life can be very unpredictable so it’s impossible to plan for everything.

 

combine (verb)

kəmˈbaɪn

to use two or more things together

My partner and I had to combine our incomes to be able to buy a house.

 

irresponsible (adjective)

ˌɪr.ɪˈspɒn.sə.bəl

not thinking much about the possible results of what you do

I was very irresponsible when I was young, but luckily, I never got into trouble.

 

give* up [something] (phrasal verb)

ɡɪv ʌp

to stop having something, such as a pet, or to stop doing something

Last year I gave up smoking and I feel so much healthier.

*The object can also be placed after the main verb in this phrasal verb.

 

pay* off [something] (phrasal verb)

peɪ ɒf

to pay back money that you owe

It takes most university graduates years to pay off their student debt.

*The object can also be placed after the main verb in this phrasal verb.

Luxuries Don’t Guarantee Happiness

According to conventional economic theory, most people act rationally when it comes to taking care of their finances. However, people still often behave in unpredictable ways with their money. Behavioural finance combines psychology, economics and finance to try to explain people’s spending and saving habits.

According to research, one of the most irresponsible things that people often do is spend money on expensive luxuries that they can’t afford. These are typically things that they do not need but they buy them anyway because they believe it will make them happier. However, this is not necessarily true.

In one research study, two groups of people were given some chocolate to eat. One group were told to eat only one piece of chocolate all week while the other group were told to eat as much chocolate as they wanted. After one week, the people in both groups were given some more chocolate. Those who had eaten chocolate all week didn’t enjoy it as much as those who had only eaten one piece.

Once we become used to something, even if it is an expensive luxury, it doesn’t provide as much satisfaction. In economics, this is known as ‘the law of diminishing marginal utility’, and in positive psychology, it is known as ‘hedonic adaptation’. However, this doesn’t mean that you have to give up your luxuries completely, it just means that you should do them less frequently. You will not only save money but also enjoy your luxuries more.

The most sensible approach to financial planning is to make sure that you don’t run out of money. Making sensible changes that will show quick results, like paying off debt and increasing your savings, will help. Making extreme changes to your spending, such as resisting the temptation to buy expensive luxuries, will obviously make a big difference also. However, it might be easier to save a little bit of money each day. Making small changes to your spending can lead to significant results in the future that will motivate you to continue.

Being able to imagine your positive goals and taking action to make them happen is the best attitude to have toward financial success. While this may seem like common sense, this is ultimately what behavioural finance is all about. While enjoying the better things in life is important, being sensible about what you can afford and learning how to appreciate life’s luxuries can help you manage your finances more efficiently.

QUESTIONS

1. According to economic research, people are generally sensible with their finances.

TRUE / FALSE / INFORMATION NOT GIVEN


2. The article describes luxuries as things that people cannot afford.

TRUE / FALSE / INFORMATION NOT GIVEN


3. According to the research study involving chocolate…

a. the more chocolate you eat, the more you want.
b. people appreciate chocolate more when it is free.
c. people appreciate chocolate less when they eat it a lot.


4. According to the article, if you buy luxury items, you will never be able to save money.

TRUE / FALSE / INFORMATION NOT GIVEN


5. How would you summarise the advice in the article in your own words?

Discussion

  • What do you think is the most interesting thing about the article and why?

  • How irresponsible do you think you are with your money?

  • What do you personally consider a luxury?

  • What is the most expensive luxury you have ever paid for, and was it worth it?

  • What do you think you spend most of your salary on, taxes, food, utilities (electricity, gas, water), transport or luxury items?

  • If you had more money, how would you use it to improve your life?

  • What do you think is the best way to save money?

  • What would you be prepared to give up if you wanted to save money?

  • If you could spend anything you want on one luxury, what would it be and why?

  • What do you think of this statement by Jean-Jacques Rousseau – “The money you have gives you freedom; the money you pursue enslaves you”?