You’ve heard that good ol’ cliche, ‘money doesn’t buy you happiness’. The one that’s often used and abused by someone who’s minted and faking personal wisdom + happiness on their Instagram feed (and loves tagging their pics ‘#soblessed’, a.k.a. #sobragging).
Well, the idea that money can’t buy happiness is inherently wrong for many of us. Starting with anyone who struggles with the daily stress of making ends meet, feels the anxiety of debt or the powerlessness of not being able to afford a major expense.
Dam the rain mainly on the plain
It’s not that rolling in it makes you happy. It doesn’t. Research has shown that beyond a certain level (around $75,000), earning more income doesn’t make us sustainably happier.
But earning more income is different from having sufficient wealth (income = rain🌧, wealth = the dam🍵). There’s plenty of evidence showing that the more we earn, the more we spend … so our dam never really rises. And herein lies the key:
Having a happily-filled dam versus an empty dam can make a huge difference to our happiness.
Pain matters more than gain
One of the biggest sources of pain is debt. Credit card debt is linked to anxiety, and falling into debt beyond our means is one of the most stressful events possible in life. It’s why there are debt helplines, debt consolidators, debt sharks and loads of balance transfer options. Some are there to help, but others are there to exploit your pain.
The less obvious cause of pain is plain old life. It’s inherently uncertain. We’ve mentioned how optimism bias can lead us astray by giving us a false sense of security. We struggle to believe it’ll happen to us but relationships break up, accidents happen and people lose jobs – constantly. 1 in 2 of us will get cancer by the time we’re 85. Most of us tend not to plan for any of these eventualities.
But having the financial means to weather these inevitable storms is a huge fighter of unhappiness. While we won’t be happy about getting mugged or being sick, not having to worry about money on top of it all takes an immense burden from us. And as Nobel Prize winner Daniel Kahneman has found, people feel a loss twice as painfully as an equivalent gain.
Spending mindfully = happiness
It’s not about saving Scrooge McDuck style. Some things we spend money on can give us lasting happiness. The experience (especially with family or friends) of a fun-filled holiday or that 90s boyband concert can give enduring pleasure and treasurable memories. But that dress that’s uber-fashionable but totally not you, or that spiralizer that will never turn any vegetable into real pasta? Those will only give you a temporary sugar hit of satisfaction, forgotten in days.
Studies also show that lending our possessions to others help us enjoy them more than once, and that giving money or spending on others generates more satisfaction than spending on ourselves (see Selfish Giving).
Freedom = happiness
The best thing about money is the freedom it brings us. The freedom to take that dream job that pays peanuts. The freedom to get up one day and move to Paris. The freedom to leave an unhappy relationship, to walk out on a jerk-boss or say no to that jerk-client. The power to control our own destiny is something many of us are endlessly striving for. It isn’t about being wealthy, it’s about having the freedom to make the choices we want and enjoy the more important things in life, without worrying about money.
What can you do to be happier?
One of the biggest challenges with getting on top of our money relates to other people. Social pressures embodied in advertising and social media encourage us to score each other on mindless consumption that makes noone happy, least of all you.
But there must be a better way. A way that empowers you to make your own decisions, doesn’t rip you off and allows you to live the life you want in the way that you want.
Sadly, there actually isn’t an easy answer. But we’re working on it!
In the meantime, here’s what you can do:
- Assess how much you have in your dam (your rainy day fund) ☔️. It’s ok if it’s bone dry – it’s a good place to start.
- Think about your earnings (your rain) 💦 and how much you can put aside every pay day to add to your dam.
- Pay yourself first 💌. Putting aside that money from your paycheck as soon as you get it means you’re less likely to spend it on crap.
- Speaking of crap, rethink it 👠. Next time you reach for that snickers bar or see that cute pair of shoes, consider whether it’ll make you happy next week. A good method? Think about the other times you’ve impulse-bought shoes, or impulse-bought chocolate. Then wait until next week to buy it.
- Free yourself of comparisons 🙅🏻. Know that when you’re seeing how much fun others are having by living large, it’s often manufactured, and rarely lasts. Whereas you seek lasting happiness.
- Spend time (+ money) with your friends and family 👩❤️👩 – the people whom you love, and who love you. It’ll be time and money better-spent.