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When we think about spending our money wisely, we usually focus on getting the best value for the lowest price. We comparison shop and download apps to find the latest discounts and deals; we’re seduced by the daily special or the limited-time offer.

We’re seduced by the daily special or the limited-time offer.

But, for those of us lucky enough to have disposable income, what if we defined wise spending in terms of the happiness that it brings? That’s a completely different way of thinking about our purchases, and one that we have little practice in.

“Most people don’t know the basic scientific facts about happiness—about what brings it and what sustains it—and so they don’t know how to use their money to acquire it,” writes Elizabeth Dunn and her colleagues in a 2011 study.

Luckily, more than a decade of research has been investigating how different types of purchases affect our well-being, and it can help us turn spending into a happiness practice in its own right. The key, it seems, is to spend money in ways that bring you closer to other people.

1. Spend money on experiences

In a in 2003, researchers found that buying experiences—like seeing a Broadway play or going for coffee with a friend—improves our well-being more than buying possessions. Across different surveys, more than 1,500 participants tended to say that experiential purchases made them happier and were better investments, and that their moods were more positive when recalling them.

More than 1,500 participants tended to say that experiential purchases made them happier and were better investments.

Thus began more than a decade of research into this phenomenon, unearthing some of the reasons why buying experiences is so beneficial—which can inform our financial choices in the future.

But first, some definitions: Although the distinction between experiences and material goods is sometimes fuzzy (think: books and cars), we tend to intuitively understand which is which. Researchers typically define experiences as things we buy in order to do something, which don’t endure in the form of a possession; and material goods as things we buy in order to have something.

2. Better yet, spend money on experiences you share with others

Not all experiences are created equal, though, and it’s up to us to choose the ones that are most fulfilling. In a , when researchers separated out experiential purchases into social ones and solitary ones—going out to dinner with friends or alone, for example—participants reported that the solitary experiences brought just as little happiness as the material things.

“It may be less the doing that creates happiness than it is sharing the doing,” the authors of that study explain.

“It may be less the doing that creates happiness than it is sharing the doing.”

Even if we can’t share an experience with others initially, we can share it with them later by telling the story—another advantage that experiences have over material things. Our new kitchen gadget or trench coat loses its conversation value shortly after we buy it, but “talking to others allows us to relive experiences long after they have happened. In this sense, experiential purchases are gifts that keep on giving,” write the authors of a .

In fact, that study found that the more we chatter about our experiential purchases, the more happiness we derive from them. A also found that people are more likely to mention experiences they bought (vs. material things) when recounting their life stories.

With a little change in perspective, though, we can extract more happiness from our possessions by focusing on the experiences they facilitate. At least different found that thinking about purchases like music and TVs more as experiences than objects helped people see them as more self-expressive and reduce the risk of buyer’s remorse. So the next time you buy a new flatscreen, think of it not as a fancy piece of technology but as a prop for cozy evenings with your spouse, and you might enjoy it all the more.

The story emerging from the research is that experiences become part of our identities, which makes them feel valuable in their own right. Compared to possessions, we about what others will think of our experiences, and they don’t generate the same kind of regret. If anything, we lament the experiences we didn’t buy: the shows we were too busy to attend, the trips we put off. Though experiences may be fleeting, they’re essential to our happiness—so now you’ve got a science-backed excuse to invest in them.

3. Spend money on other people

If you want to bond with other people, you could buy experiences to have with them—or you could spend money on them directly.

In a , researchers gave each participant up to $20 to spend on themselves or on others that same day, then called after 5 p.m. to see how they were feeling. In the end, contrary to expectations, participants reported being happier after treating others rather than treating themselves. The same was true for employees who spent more of their bonuses on donations and gifts, rather than personal expenses and treats.

Contrary to expectations, participants reported being happier after treating others than treating themselves.

And this effect may not be restricted to rich, White Westerners. For a , researchers gave participants in Canada and South Africa the choice to get $2.50 in cash, take home a $3 goody bag, or give a $3 goody bag to a sick child. Those who made the generous decision reported greater positive emotion at the end of the experiment, in both countries. So did participants in India who simply remembered purchases made for others, compared to remembering purchases for themselves or not recalling anything in particular.

But just because it typically feels good to spend on others doesn’t mean that all generous purchases make us feel warm and fuzzy. Research is starting to understand exactly when “prosocial” spending contributes to well-being, and how to find the most fulfillment in giving.

For example, another distinguished between spending on others that strengthens our social connections and spending on others that doesn’t. Researchers gave participants $10 Starbucks gift cards to use that day in one of four ways: treating themselves to a coffee alone, giving the card to someone else, taking a friend but spending the card on themselves, or taking a friend and treating them. In the end, the happiest participants were the last group: the ones who combined spending on others with social connection (and venti caramel lattes).

4. Spend money on the right people

Does it matter on whom we spend money? Preliminary research suggests that it might. In a , participants who recalled spending $20 on someone close to themselves reported feeling more positive emotion than those who recalled spending $20 on an acquaintance. In the context of evolution, the researchers explain, this makes sense: Early humans who enjoyed helping family members were more likely to see their DNA survive.

The research about spending on others is particularly relevant when we consider donating to charity. For example, it’s important for donors to : When Canadians were given the chance to donate to the charities UNICEF or Spread the Net, bigger donors reported feeling more positive emotion and more satisfaction with life than smaller donors—but only those who gave to Spread the Net, whose pamphlets emphasized that a single mosquito net can prevent malaria and save a child’s life.

Simon Fraser University assistant professor , who was involved in both of these studies, applies this research to her own life by treating friends and family to small gifts, and trying to make donations that have a big impact. The upshot of her research is that if giving leaves you feeling detached or drained, there may be smarter ways to allocate your dollars so everyone can benefit.

As you might have noticed, almost all of this research asks people to recall spending from the past, or contemplate imaginary choices. Researchers will gain even greater insight when they start to survey participants in real-time to see how they’re feeling about their purchases, like this did, or follow them for years after a purchase to see how those feelings changed with time.

5. Express your identity through spending