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Your Finance: Latte as an object lesson on happiness

If you go anywhere near a Starbucks at this time of year, you may feel the urge to buy its renowned Pumpkin Spice Latte. This sweet, spicy drink topped with whipped cream and nutmeg costs about $4 for the "tall" (i.e., small) size.

This isn't a diet column, so I'm not going to tell you not to drink one for your health's sake. Nor am I going to tut-tut about the cumulative effect of small indulgences on your personal balance sheet.

Rather, the latte offers an object lesson about how to get more happiness out of the money you spend. Here are some ways to make the most of a small treat, whatever it might be.

  • A treat won't bankrupt you: Forgoing any unnecessary expenditure -- say, $4 for a latte every workday -- could add up to a $1,000 savings per year.

    But it's the big line items on the budget that knock most people off balance financially: stagnant wages, crushing debts, housing that's too expensive and health emergencies, to name a few.

    To reach real financial security you need to get control of the big-ticket items and put 10 percent of your income away for a rainy day. Once you have that control, there's no reason to sweat the small stuff. That is, as long as you enjoy it.

  • Make it an event. There's a lot of research showing that we get more satisfaction out of experiences than objects. And a recent study shows that especially as we get older, ordinary, everyday experiences offer a huge happiness boost.

    A cup of coffee is technically an object, but if you build a ritual around it -- window shopping, sitting with the paper, chatting with a friend -- it will pay off in increased happiness.

  • Share it with others. Humans are social creatures. The quality of our relationships is the single most important factor in our happiness. So go on a coffee run with a colleague. Or just talk to your server and the other people in line.

  • Give it away. Have you heard of a "pay it forward chain"? This happens when sometimes hundreds of customers at a Starbucks or other fast food chain decide to pay for the next person's drink.

    Being generous has been shown to boost happiness, so the next time you buy a latte, consider tossing a few dollars in a charity box or getting an extra cup of coffee for someone who can't afford one.

  • Give it up for a while. Here's where the seasonal nature of the Pumpkin Spice Latte works in your favor. Science shows that we adapt quickly to pleasurable experiences. In order to get the most bang for your buck with any small indulgence, a smart, if paradoxical, move may be to stop indulging for a week, a month or even a whole year before returning to that thing you love.

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