The curve shows how much fulfillment you get for the money you spend. According to Joe Dominguez, the originator of this idea, when you're just starting out you spend money on things you need. For example, if you lack the basic necessities of life, then every few pennies you spend on food, warmth, shelter, gives you maximum fulfillment. How refreshing is a glass of iced water when you're truly parched?
But once all your basic needs are met, it requires more and more extra money to get just a little bit of extra fulfillment. In The Tightwad Gazette, Amy Dacyczyn gives as an example:
...the fulfillment received from the first $200 car as a teenager versus the $20,000 car bought 10 years later. The new car was nice ... but not 100 times as nice.
What's the message? The adverts lie (well, duh!). You can't buy happiness. Unless you're buying food when you're starving or shelter when you're cold, the things you buy are never quite as satisfying as you hoped they'd be. You know it's true. So save your money for when you really need it, and seek fulfillment in ways that money can't buy.