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Why Money Can Buy Happiness

Why Money Can Buy Happiness

Ah, happiness – an ideal many of us chase, hoping for contentment, bliss, and joy along the way.

While it may not be lasting, studies suggest that money can actually help you buy happiness. Forbes reports that University of Michigan economists Betsey Stevenson and Justin Wolfers convincingly demonstrated that the affluent are more content with their lives than the poor; in a paradigm-shifting study, they also showed that rich countries house happier citizens than poor countries. But why is that?

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Having money allows you to do what you want to do.

Their findings are not much of a shock, if we pause to muse. Money is a tool, and we use it to purchase high-quality food, fresh water, medical and dental care, and access to gyms or fitness classes that help keep us physically healthy. It takes funds to buy books, magazine subscriptions, adventure trips, or membership in hobby clubs to keep us intellectually stimulated. Dollar bills pay for the gas, air fare, and admission fees required to see those sites our souls thirst for, such as art museums or religious locations overseas, and allow us to donate to causes we believe in.

Having money can lead to increased confidence.

Money can create emotions that lead to positive circumstances. A new outfit, for example, is commonly considered to boost confidence. Increased confidence can land you that job, date, contract or simply add some hip-loosening swagger to your step. Money can buy fresh experiences and the equipment required to pursue hobbies, over time allowing you to cultivate a better sense of self and a creatively well-balanced being. For those who crave a sense of security, there is peace in knowing that enough money is saved in a bank account to cover a car that breaks down, a medical emergency with a child, or another unforeseen circumstance that can be smoothly and easily handled with appropriate funds.

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Financial security may also secure your marriage.

Money worries literally kill unions, as Jeffrey Dew presents in a 2009 work on the various correlations between financial problems and divorce. Loneliness or lack of a partner is a keenly felt source of sadness for many, and it stands to reason that a fulfilling, supportive partnership would be a source of happiness. An outlay of funds may also help hire nannies, cleaners, property maintenance crews, and other support staff to help a home run smoothly, easily, and with less stress on the couple in the marriage, perhaps in turn improving the chance of success in their partnership.

Money can buy happiness up to a certain point.

Buying happiness may not be quite that simple, however. Princeton University expert Angus Deaton’s work with Daniel Kahneman found that while the rich report feeling more positively about their lives, there is no direct correlation between wealth and a satisfied daily emotional state. Furthermore, they found that health, care giving, loneliness, and smoking were more prominent indicators for daily emotions. In conclusion, they argue that income can buy satisfaction but not happiness, though lack of income has a negative effect on both.

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How much money does it take to reduce stress and potentially allow for greater satisfaction or happiness? Enough to take care of needs, but not more than $75,000 in the United States, argue Deaton and Kahneman. After that threshold, subjects reported no greater increase in happiness or satisfaction than they experienced at that point.

Is money earned more satisfying than money inherited? Is it possible to quantify whether expensive tastes negatively impact happiness? The relationship between money and happiness is a complex one, but it seems that dollars can buy delight. For those who can afford it, at least.

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Wondering if anything presented here applies to you? Check out these 50 Money Quotes by Famous People that Can Change your Attitude Toward Money.

Featured photo credit: M.C. Chavez via flickr.com

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Last Updated on January 21, 2020

How to Develop a Millionaire Mindset in 6 Simple Steps

How to Develop a Millionaire Mindset in 6 Simple Steps

We all like to dream about being financially wealthy. For most people though, it remains a dream and nothing more. Why is that?

It’s because most people don’t set their mind to achieving that goal. They might not be happy in their current situation but they’re comfortable – and comfort is one of the biggest enemies of growth.

How do you go about developing that millionaire mindset? By following these simple steps:

1. Focus On What You Want – And Take It!

So many people are too timid to admit they want something and go for it. When there is something that you want to accomplish don’t think “I could never actually do that”, think “I could do that and I WILL do that”.

Millionaires play to win, not to avoid defeat.

This doesn’t mean to have to become a selfish jerk. What it means is becoming more assertive and honest with yourself. You don’t have to grab off other people. There is a big pot of unclaimed gold in the middle of the table — why shouldn’t you be the one to claim it? You deserve it!

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2. Become Goal-Orientated

It’s almost impossible to achieve anything if you don’t set firm goals. Only lottery winners become millionaires overnight. By setting yourself attainable goals, you will get there eventually. Don’t try to get rich quickly — get rich slowly.

Let’s take the idea of making your first million dollars and expand on what kind of goals you might set to get there. Let’s also say you’re starting at a break-even position – you’re making enough to get by with a few luxuries, but nothing more.

Your goal for the first year can be having $10,000 in the bank within a year. It won’t be easy but it is doable. Next, you need to figure out the steps you need to take to achieve that goal.

Always look at ways to make growth before cutbacks. With that in mind, you might want to see if you can negotiate a pay rise with your boss, or if there’s another job out there that will pay better. You might be comfortable in your old job but remember, comfort stunts growth.

You may also have other skills outside of your workplace that you can monetize to boost your bank balance. Maybe you can design websites for people, at a fee of course, or make alterations to clothes.

If this is still not enough to make the money you need to save $10,000 in a year, then it’s time to look at cutbacks. Do you have a bunch of old junk that someone else might love? Sell it! Do you really need to spend $10 on your lunch everyday when you could make your own for a fraction of the cost?

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If you are to become a millionaire, you need to start accumulating money.

Here’re some tips to help you: How to Become Goal Oriented and Achieve More in Life

3. Don’t Spend Your Money – Invest It

The reason you need to accumulate money is for step three. Millionaires tend to be frugal people, and that’s because they know the true value of money is in investing. Being your own boss goes hand-in-hand with becoming a millionaire. You’ll want to quit your regular job at some point.

Stop working for your money and make your money work for you.

Rather than buying yourself a new iPad, that $500 could be used to invest in the stock market. Find the right shares (more on that later), and that money could easily double within a year.

There’s not just the stock market — there’s also property, and your own education.

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4. Never Stop Learning

The best thing you can invest in is yourself.

Once most people leave the education system, they think their learning days are over. Well theirs might be, but yours shouldn’t be. Successful people continually learn and adapt.

Billionaire Warren Buffet estimates that he read at least 100 books on investing before he turned twenty. Most people never read another book after they’ve left school. Who would you rather be?

Learn everything you can about how economics works, how the stocks markets work, how they trend.

Learn new skills. If you have an interest in it, learn everything you can about it. You’d be surprised at how often, seemingly useless skills, can become extremely useful in the right situation.

Start developing the habit of learning continuously: How to Create a Habit of Continuous Learning for a Better You

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5. Think Big

While I advise to start off with small goals, you absolutely should have a big goal in mind. If you have a business idea, then that is your ultimate goal – to start that business and make a success of it. If you want to invest your way to millions of dollars and do little work other than research, then that is your big goal.

There is no shame in not achieving a big goal. If you run a business and aim to make $1 million profit in a year and “only” make $200,000, then you’re still significantly ahead of most people.

Aim for the stars, if you fail you’ll still be over the moon.

6. Enjoy the Attention

To be successful, you have to be willing to promote yourself and enjoy the attention to a certain extent. Now the attention doesn’t need to be on yourself, it could be on your brand, but attention definitely attracts money.

Never be embarrassed to get your name out there. That means finding a spotlight and being brave enough to step right up underneath it.

If you run a business, try contacting the local papers. You’d be surprised at how amenable they often are to running a story about you and your business, and it’s all free publicity.

Above all, remember: You control your own destiny. Push hard enough for anything and you’ll get it.

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Featured photo credit: Austin Distel via unsplash.com

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