Once I saw a bumper sticker that read, “People who think money can’t buy happiness must not know where to shop.”
While I abhor the empty-headed entitlement of the statement, I have to say that its underpinnings are true. I’ve been broke and I’ve made a decent salary. Guess which is better?
In the strictest sense, money can buy happiness. Having enough cash means you don’t have to choose between heating and eating, or to beg the landlord to give you another week to come up with the rest of the rent. When your car breaks down you can fix it; if your kid gets strep throat you can pay for the antibiotic.
In an interview on National Public Radio, Harvard University’s Daniel Gilbert said that money can’t buy “a fixed amount of happiness.” But he also pointed out it’s “ridiculous” to believe that cash has nothing to do with contentment.
“All you have to do is go stand outside with no coat, no shoes, nowhere to go and hungry, and in about five minutes you go, ‘Wow, money would make me happier,’” said the psychology professor and author of “Stumbling On Happiness.”
“So money is obviously related to happiness, but its relationship is intricate and complex.”
How do you figure out that relationship? Money Talks News founder Stacy Johnson has some tips in the video below. Check it out, then read on for more detail.
You don’t necessarily need loads of lucre to be happy; in fact, there seems to be a point of diminishing returns. A Princeton University study indicates the magic number is $75,000.
The lower a person’s annual income falls below that benchmark, the more unhappy the person feels. Yet no matter how much more than $75,000 people earn, they do not report greater feelings of happiness.
To be clear: The study is not saying that higher salaries won’t improve your life. (See “heating and eating,” above.) Instead, it suggests that after $75k a person’s emotional equilibrium is more affected by factors such as “temperament and life circumstances.”
Rethinking how we spend
Back in 2007 I was a midlife college student living on approximately $12,000 per year. My budget was pretty bare-bones yet “charitable giving” was a non-negotiable line item, for two reasons:
- Need existed. (Duh.)
- It got me out of my own head, i.e., it reminded me that other people had it a lot worse than me.
It wasn’t much of a donation – just $20 per month. That double sawbuck could have bought me a nice bag of oranges plus something meatier than neck bones to flavor the pinto beans that made up the bulk of my diet. But giving the money away made me feel good.
That’s a pretty common reaction, according to Elizabeth Dunn and Michael Norton, co-authors of “Happy Money: The Science of Smarter Spending.” In a Harvard Business Review article, they wrote that even “modest forms of generosity can make us happy.”
A decade’s worth of research shows that “asking people to spend money on others … reliably makes them happier than spending that same money on themselves,” the authors note.
“By rethinking how we spend our money – even as little as $5 – we can reap more happiness for every dollar we spend.”
What can be gained?
The ways that money buys happiness are as individual as our desires. Some expenditures are purely physical: big houses, high-end automobiles, expensive furniture.
Sometimes we buy ourselves the gift of time or reduced stress. There’s a reason that people like my cousin Gertrude are cleaning up, so to speak, with their housekeeping businesses: If you have just three or four hours between getting home and collapsing into bed, would you rather spend that time relaxing or spend it scrubbing floors?
And there’s no denying that money can bring some pretty fabulous experiences. Travelers fly to Europe (and upgrade to first-class plane tickets). Hobbyists indulge themselves freely (ever try telling a quilter she has “enough” fabric?) and music fans buy box seats for the symphony or the opera.
But happiness can be bought only if you know what you’re seeking. Don’t just spend haphazardly, hoping that the next DVD or car accessory will bring lasting joy. Instead, try to determine what you want out of life: More time? More clothing? More collectible figurines?
Examine those choices. What do you expect to gain? Is that realistic? Think about other things you could do with the money — pay down debt, create a retirement plan, pay cash for your next car.
Oh, and look around you: Is your home and/or storage locker already filled with stuff you thought would be the answer? If your life is already replete with things you’ve stopped noticing, it’s probably time for a reality check. Maybe a garage sale, too.
Spending with intention
I’ve been fairly happy without money. But would I willingly go back to living on dried beans or to the time when I used a scrub board to do the laundry (including the baby’s cloth diapers)? Nope. I can buy more than one kind of food now, and I delight in tossing dirty clothes into a washing machine.
I can help people I love and people I don’t even know. I can go to a midnight movie with my best friend and get kettle corn if I want it. (Hint: I almost always want it.)
It’s OK to spend money. Buy that kettle corn three times a week if that’s what makes you happy. Just do it mindfully, vs. following the latest trends or flailing around with a credit card in the hopes that this time you’ll find true bliss.
To turn that bumper sticker motto on its head: Some people know that money can buy happiness – they’re just really careful about what they buy.