I’m reading the book Happy Money. It is helping me understand how we can use money to create happiness in our lives. It’s an easy read–follow the link above to buy it on Amazon (and I’ll receive a small commission) or look for it in your library.
The research on how money makes us happy is super interesting and not always intuitive.
I always thought the more money I made, the happier I would be. It seems like life would just get easier. But the research shows that once you make $75,000 a year, you don’t get happier with more income. I’m sure this number varies based on the cost of living in your area but once you reach that amount, your happiness doesn’t rise.
I feel like I’ve seen this in action. We have a small townhome in our desert location–it is in a community of 200 similar homes. Now that we’re spending most of the winter there, it feels too small.
But I love our little place. One of the things I love most is the opportunity to socialize seems endless. Taking the trash out or getting the mail turns into a chat with a neighbor. If we sit in our front courtyard for cocktail hour, more times than not a neighbor pops over for a drink. A walk in the community often results in an invitation for a fun activity.
Even when we have no intention to buy, shopping for real estate is a hobby of ours. We spend hours riding bikes around the area looking at neighborhoods and homes. There are some amazing, multi-million dollar horse properties a stone’s throw from our community. But here’s the thing, we NEVER see any homeowners in those neighborhoods. We see people mowing lawns and maintaining the homes but never any homeowners.
I think you never see them because they are all too busy working to pay for those fancy homes. I’ve seen no socializing. I wouldn’t want to live there even if I could afford one of those fancy homes. More money seems to create more loneliness or more complicated socializing.
Ok so you’re making at least $75,000 what should you do with that money to create the most happiness?
Buy experiences rather than stuff. I haven’t been the best at this, but I’ve bought stuff that created experiences so maybe that counts. My friends and family are essential to my happiness because they help me create experiences. I can’t think of a single possession that is absolutely essential–well maybe books but they are experiential too, right?
Make it a treat. I’ve talked about this before. I used to make lattes only on the weekends. They felt like such a treat, it makes me cozy just thinking about it. Now I make them every day so they don’t seem as special. We really cheat ourselves of enjoyment when we turn something special into something ordinary. What ordinary experience in your life can be turned back into a treat?
Buy time. Outsource tasks you dislike so you can spend your time doing something you are passionate about. Outsourcing tasks so you can work more doesn’t increase your happiness so be careful with your outsourcing!
Fortunately, between the two of us, there are few household tasks we really dislike. Not outsourcing helped us reach financial independence. So I’d say be very selective about your outsourcing.
Pay now, consume later. Anticipating pleasure enhances your happiness. Vacations provide the most happiness before they occur. Once I’m on vacation, the hassles of travel and the anticipation of returning to real life decrease my happiness. But before I go, I only think about the fun to be had.
Invest in others. Spending money on others provides a bigger happiness boost than spending money on yourself. I don’t have much extra money but I do have extra time and I need to look for ways to help others to boost my happiness.
Do these seem right? What boosts your happiness?