- We’ve all heard the phrase “money can’t buy you happiness,” but the wise allocation of your resources in certain ways can cultivate long-lasting feelings of positivity.
- Buying things that promote financial security gives us a feeling of safety and removes the feeling of anxiety.
- Using money for charitable works also lifts the sense of happiness in a person’s life.
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According to the Mind over Money survey conducted by Capital One and The Decision Lab, 77% of Americans report feeling anxious about their finances while 58% said they feel that their finances control their lives. On the other hand, 52% of the survey participants stated that they are having a hard time controlling their money-related worries.
If the lack of money makes a person anxious, can the opposite—having enough money—make a person less stressed? The answer is no.
Wealthy people also have their fair share of problems because of having more than enough money in the bank.
If this is the case, can money truly buy you happiness? In these four instances, the answer is yes:
Buying Financial Security
As Capital One discovered, the fact that a person isn’t financially secure makes one feel anxious about the future. In fact, people with life insurance are happier than those who don’t according to a survey in Australia.
Just try to imagine yourself going to a grocery store without worrying if your budget would be enough for your family for a month. Picture yourself not having to deal with monthly car and house payments because you paid for these things in cash.
Financial security gives a person a sense of safety that promotes positive feelings and outlook in life. Spending your hard-earned money on things that promote financial security should help you increase happiness in your life.
Spending on Personal Development
Economist Richard Easterlin conducted a study that shows a connection between education and happiness. In his study, he found out that people with more education were happier than those who don’t.
This could be related to the fact that people with more skills and knowledge have access to better career opportunities that enable them to earn more than their less-skilled peers.
Using your money to improve yourself enables you to have the skills necessary for you to earn more money that you can use to ensure your financial security.
Using Money for Charitable Acts
Harvard Business School professor Michael Norton and his colleagues conducted a study in 2008 to see if spending money on one’s self makes a person happier than giving it to others. The majority of the participants predicted the former to be the case. However, after performing the actual act of spending money on themselves and giving money to other people, participants reported that they felt happier when they gave money to other people.
Helping others by giving money knowing that it will make a huge difference in someone’s life and well-being gives us more happiness than just keeping our resources to ourselves.
Spending on Experiences Over Possessions
The anticipation of your upcoming beach getaway makes you excited and happier than the happiness you feel when buying a new possession. The memories created by experiences like an exotic vacation or a once-in-a-lifetime concert outlast the memories created by purchasing a new shirt. That is why people replay experiences of their vacation or a concert they went to with friends and family more than remembering the day they bought a new smartphone.
Money is simply a tool that could either make our lives happier or miserable. We need to be extra careful and thoughtful about where we put our hard-earned money. Some purchases bring us temporary and sudden bursts of excitement but some things bring lasting happiness in our lives. The relationship of happiness with your money depends on the wise allocation of your resources.