Love or Lust: Will Money Make Me Happy?

Love or Lust:

Will Money Make Me Happy?

How much money do we need to be happy? It’s a question that is asked as often as money has been a form of exchange for payment. Can money really buy you happiness? These are questions that we, as consumers, ask every day. Whether we are buying morning coffee at Starbucks or a new car we are thinking about whether we have enough money to get what we want. In this respect, we are constantly using money as a way to maximize our personal happiness, even if our target purchase is outside of our financial means.

Let’s explore if more money means an increase in happiness:

We, as humans in a material driven world, do need a certain amount of money to be content. We need to have shelter, food and other human needs, but are these the things that actually make us happy? While there is a relationship between money and happiness, the sweet spot for happiness is at a surprisingly lower point than many would expect. According to Inc.com, people’s levels of happiness only increases up to a certain amount; which is usually between $60,000 and $80,000, and this amount is the sweet spot for happiness. After that, it’s a point of diminishing returns on your overall happiness. This means that more money won’t necessarily increase our happiness after that point.

"The joy of buying an item fades fast in comparison to experiences, which over time can appreciate in value and add to our overall happiness."

Do you think owning a house will make you happier? Turns out homeowners are no happier than renters. Due to the added expenses and stresses of maintaining the upkeep on a house, homeowners spend less money on leisure activities than renters. Not to mention the time and money it takes to fix the roof, repave the driveway or do landscaping. Interested in a luxury car? Luxury car owners derive no more pleasure from their automobiles than those who drive “economy cars”.

"While there is a relationship between money and happiness, the sweet spot for happiness is at a surprisingly lower point than many would expect."

Why do so many people assume money brings happiness? People tend to think money is the answer for all, but the correlation between happiness and income is so tiny.

What may explain why we think money makes us happy may be obtaining a certain status. While you may land that big dream job, it can bring on a lot more added stress, but we accept the job because society tells us we should constantly be working towards the goal of more money. We are very much a money driven society.

So, how do we spend our money most effectively to increase our happiness? If you are going to spend money (which we all do) and splurge occasionally, you’re better off spending it on experiences than material goods. Experiences create memories, contribute to our relationships and improve our physical and mental well-being. In other words, invest your money on going to a concert or out to dinner with friends versus buying that blouse or designer purse on impulse. The joy of buying an item fades fast in comparison to experiences, which over time can appreciate in value and add to our overall happiness. How we spend our money is just as important, if not more so, than the amount of money we actually have. It’s also important to point out that when you do spend your money on a move or night out, you may be happy during the duration of the even and a short time after but it won’t have a heavy effect on your current state of happiness. A great way to boost your overall happiness without even having to spend money is to be altruistic.

When evaluating your finances and monthly expenses, ask if your spending habits are actually in alignment with what makes you happy. It’s not an easy question to answer, but chances are, you’ll be able to cut out expenses that aren’t worth it and you’ll be able to save extra money to spend on experiences which will be of greater value to you in the long run. You may not think you have a lot of money, but you can create worthwhile experiences by making the most of what you do have. It does not take as much money to be happy as you might think; make the most out of the money you do have!

Leslie Tayne

Leslie H. Tayne has more than 15 years' experience in the practice area of consumer and business financial debt-related services. Speaker, Author of Life & Debt, Attorney and Founder of the Tayne Law Group, P.C., Leslie is working towards reshaping the debt industry by offering real, proven solutions to help her clients get back on the road to financial freedom.

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