Sure, money can buy you the latest plasma televisions, state-of-the art whiz bang gadgets and even the very best in early vintage wine – but can money really make you happy? Well the short answer is money can make you comfortable, yes. But happy? Not so much. The latest psychological studies on money and happiness suggests that once people reach a certain level of income – enough to ensure a comfortable lifestyle – the more additional money earned does not translate to additional happiness. So how can you best use your money to maximise happiness?
Buy experiences and not stuff – If you really want your money to give you happiness, then don’t spend it on televisions, mobiles or other like commodities. Instead, spend it on experiences such as dinner with a loved one, a night at the theatre or a holiday abroad. Experiences that move you, change your perspective or broaden your outlook are priceless, and the effects of such experiences are likely to remain with you long after the actual event is over.
Step back and look beyond yourself – If you really want to be happy, spend your money on somebody else. Studies time and again show that the effects of spending money on others result in happiness to the giver – in fact, a greater level of happiness is achieved than if the giver had spent the money on themselves. Moreover, this holds true for citizens in many different countries, proving the connection between happiness and generosity is universally recognised all over the world.
Keep within budget – Whether you choose to spend your money on experiences or other people, the golden money rule still prevails: remember to always keep within your budget. Nothing counters happiness more than the bad bout of stress that comes with overspending – even if it is overspending on a present. Keep everything in perspective and stay within your budget.
Also, if you choose to spend your money on experiences rather than things, one tip is try not to spend all your money on one great, all-money consuming experience. Rather, spread out the experiences over time with smaller events to prolong your happy high. For example, don’t dine out at a Michelin star restaurant, only to never go out and eat at any restaurant for a year because you blew your budget in that one sitting (regardless of how good that dinner was!). Be budget smart and reap the benefits!
Linda Greg is a part-time freelancer and a fulltime personal trainer, with an odd, yet satisfying passion for business finance.