As marginal utility goes, though, it sounds like “spending more money” in this story includes things like “having more than one room to live in.” And, admittedly this was an inference rather than baldly stated, “nice vacations.”
Money doesn’t just buy a different grade of items. It also buys a whole slew of novel experiences, of which you only get so many in your life.
Yeah, some amount of spending can make you happier.