Money can’t buy happiness. We’ve all been told this at some point in our lives. It’s an adage that’s intended to guide us toward aspects of our life that aren’t material – love, meaningful relationships with friends and family, faith, personal fulfillment in our work lives, etc.
However, I don’t believe that this age-old notion holds true as a universal rule.
Money can buy happiness. Whoever said otherwise wasn’t spending correctly.
How you’re spending your money matters.
There have been several scientific studies that back up my claim that money can buy happiness. The key focus needs to be on how you’re spending. By spending intentionally on services and experiences – you can create happiness in your life. So, stop buying “stuff” you don’t need. Instead, focus spending your money in one of the following areas.
Buy some time.
Most of the research shows that buying yourself time is the top way to “buy” happiness. The lives we live in today glorify being busy – and that hurts us psychologically and emotionally. When we fill our schedules to the brim, we often find ourselves without enough hours in the day to do the things we truly love. Time to spend with family and friends, or to participate in a favorite hobby, is rare.
So, spend money to save time. Outsource tasks you dislike such as house cleaning or yard work. Then, focus the extra time you have on your meaningful relationships, or on accomplishing a task or goal you’ve been neglecting. Instead of mowing the lawn on a Saturday morning, maybe you spend an hour learning a new language! Or rather than deep clean the bathroom (again), you can take your family to the park.
Spend money on experiences.
If you look back on your life, you’re more likely to remember the experiences you had – not the stuff you bought. That’s because the pleasure we get from experiences lasts longer than the rush we get from purchasing material things.
Experiences are a way we connect with others, engage in the world around us, and achieve personal fulfillment. Think of the last vacation you had. You were excited and happy from the moment you booked the trip. During the vacation, you were engaged and interested. Afterwards, you have the memories you made and a sense of nostalgia – both of which make you happier. The happiness you got from the vacation is long lasting, and much deeper than the happiness you get from buying nonessential “stuff.”
One of the reasons stuff doesn’t make us happy is because we adapt to it. We’re exceptionally good at adapting to changes in our lives, and a material item is just that – a change. More importantly, once we adapt we set our sights on the next best thing.
Donate to a cause you care about.
Treating yourself can be a wonderful feeling, but treating someone else with your hard-earned money feels even better. A Harvard study conducted across 100 countries found that whether their test subjects were rich or poor, people who continually gave to charity were generally happier.
You don’t need to give away your life savings – even small donations have a positive effect on your psychological state. Additionally, the study found you can increase your happiness even more by giving to a cause where you’ll see the impact your gift has.
So, pick a charity that’s near and dear to your heart (and remember the potential tax benefits to charitable giving). Or help a friend or family member in need. Either way – you’ll be helping yourself and them by giving away your money.
Keep your budget in mind.
It may feel awesome to donate huge sums of your earnings to charity, and that trip to Disney World with your family may leave you feeling warm and fuzzy for years to come. Still, it’s important to remember your budget. You won’t be happy if you can’t afford the necessities!
In most cases, people with debt or without a savings fund to fall back on in case of emergencies tend to be less happy. Make sure that you’re taking care of the basics – paying down debt, building up savings, and covering your cost of living expenses – before you go crazy spending money on happiness-boosters.
This all circles back to the idea of spending your money the right way to “buy” happiness. If you’re spending your money on building a nest egg, getting out of debt, or your kid’s college education – you’re spending intentionally. If you’re spending money on a vacation for your family rather than another kitchen appliance you don’t need – you’re also spending intentionally.
Work to build this habit of spending money on the right things, and you’ll be pleasantly surprised at just how much happier your life can be. Remember: money is a tool, nothing more. You can use it to build the life you want. Spending your money wisely is the first step in making that happen.
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Desmond Henry is a fee-only CERTIFIED FINANCIAL PLANNER™ professional and founder of Afflora Financial Life Planning in Topeka, Kansas. He helps the retiring/retired plan their finances and invest their money. CLICK HERE to learn more.