There are numerous studies that seek to prove or disprove the theory that money can buy happiness. A recent one, however, sought to identify the amount of income up to which money buys happiness but beyond which it does not. This “satiation point” was based on a sample of over 1.7 million individuals and was calculated for different areas of the world and different categories of people. The numbers are interesting, but perhaps more interesting is how you might influence your own level of happiness by being intentional with your spending and directing it to areas known to contribute to happiness. Here are some spending suggestions that may increase your happiness:
• Buy experiences, not possessions. Few people look at the couch they bought five years ago and get a sense of happiness from it. The same is true of cars. The paint doesn’t shine as it once did, the “new car smell” is long gone, and eventually, the car requires repairs. A vacation with your family, however, could fill you with pleasure months in advance of your trip as you anticipate how enjoyable it will be and provide you with fond memories for years to come.
• Spend time with friends and family. Human beings are social creatures and there’s plenty of evidence that healthy relationships can help you live longer and be happier. The next time you’re considering a fun activity, be sure to share it with someone you enjoy.
• Buy extra time. Studies show that people who value their time over money are happier than those who don’t. So hire someone to do the chores you’d rather avoid like mowing the lawn or cleaning the house. It just may make you happier.
• Buy something for someone else. Our social wiring makes us feel more connected to others when we do something nice for someone and the thanks and appreciation we receive in return boosts our happiness. So do something nice for someone because it often feels even better than doing it for yourself.
• Eliminate financial anxiety. Money buys happiness up to the satiation point because having enough of it to cover the mortgage, buy groceries, and enjoy small luxuries allows you to avoid the anxieties that arise if you don’t have enough of it. This point is included to illustrate how higher levels of income influence happiness up to a point, but we would be remiss not to use it as an opportunity to encourage good financial housekeeping. Look for opportunities to eliminate wasteful discretionary spending that provides you with little reward and especially for opportunities to reduce or eliminate non-discretionary expenses. Non-discretionary expenses like your mortgage or rent, car payments, property taxes, utilities, insurance premiums and groceries have far reaching effects on our financial well-being and limit our ability to pursue more fulfilling opportunities.