You’ve probably heard it said that money doesn’t buy happiness. Is this true? Actually, there is a connection between money and happiness—but it’s not what you might think. Today’s blog is a roundup summary of my previous blogs on money and happiness. Take a look. Maybe you’ll find ways your income can boost your happiness level.
Connecting Money and Happiness
Although conventional wisdom says money can’t buy happiness, there actually is a connection between the two. If you’re unhappy because you don’t have money to buy food, pay bills or pay for healthcare, money sure helps! Nobel laureate Daniel Kahneman and his research team discovered that increases in income can bring increased happiness—but only to a certain point.
According to Kahneman, a psychologist and pioneer of behavioral economics, that point is $75,000 in yearly income for Americans. Apparently, as household income approaches the $75,000 threshold, making additional money seems to make us happier. Beyond that amount it doesn’t. If this concept of diminishing returns intrigues you, see my blog Does Money Buy Happiness? Sometimes.
Anyone with even a little money would want to get the most out of it. Perhaps the secret for buying happiness lies in whether or not you’re spending your money right.
Using Money to Increase Your Happiness
We can spend money in certain ways to increase our satisfaction and our happiness. Here are some proven spending tactics that just might put a smile on your face:
- Small pleasures: Don’t miss out by spending lots of money on what you think will make you happy but won’t. Because our brains quickly adapt to them, big-ticket items can be taken for granted. Often a series of smaller purchase is better for boosting your mood. My blog Buying Happiness: It’s the Little Things helps you distribute your happiness over time. Unusual, small, frequent and even surprising purchases can reset your “happy meter” for enjoyment.
- Meaningful experiences: Experiences trump objects and possessions when you’re on the market for happiness. You’ll reminisce about a vacation or a trip to an amusement park with a child more than the widescreen TV that quickly goes unnoticed. Experiences Are a Better Way to Buy Happiness encourages you to focus on building memories instead of adding to your material possessions.
- Assistance for others in need: Here’s a great happiness booster: Use your money to benefit someone else. This can increase positive feelings even more than buying something for yourself. Any skeptics out there should try the easy experiment in my blog Spending on Others is Buying Happiness for Yourself. Science supports the fact that humans are wired for social connections. We gain pleasure from helping each other—and there are plenty of needs to be met today.
- Delayed purchases: Studies have shown that looking forward to a happy event can even bring more pleasure than the event itself. Your imagination could be a deal sweetener. In my blog Buying Happiness: Anticipation Enhances Reality, I explain that “buy now, pay later” offers detract from your overall happiness. Saving for a purchase with the delight of anticipation gives you more for your money. It also helps you avoid added debt.
- Gratitude: Do you have a tendency to see others’ possessions or financial situations and feel like a “have-not”? It’s time to count your blessings by looking at the big picture. Many people cannot read, don’t know what the Internet is and can’t even access clean water. One of my daughters inspired this blog: What Are You Thankful For? Gratitude involves a conscious choice. Without increasing your wealth one bit you can feel ten times better!
Getting a Better Perspective
More money might make you happier, but only to a certain point. Obviously, what matters is how you spend it.
None of the happiness-building ideas in this roundup are off-the-charts expensive. You don’t have to be financially independent to use money in rewarding ways. In fact, the difference between a rich person and one who enjoys his or her wealth is the motive for making money and how it’s spent.