Here at Optimize Your Life we are spending 2018 systematically working through different topics in an attempt to design and live a better life. For May, we will be exploring the topic of money and happiness.
People love to tell you that money can’t buy happiness.
Even personal finance writers, who are specifically writing about money, say this all the time. I saw another personal finance blog just last week telling people that they can’t buy happiness and shouldn’t even try.
These people are well-meaning. They are right that money won’t solve all of your problems and that being rich won’t magically make you happy.
But they are wrong that money can’t buy happiness.
How to Buy Happiness
Money can buy happiness. It can do so in one of two main ways.
First, it can eliminate unhappiness. This is the most powerful use of money when it comes to happiness.
Money can protect us from the stress and anxiety that comes from scarcity. It’s hard to be happy and strive for big goals or develop meaningful hobbies when you don’t know how you’re going to put food on the table or a roof over your kids’ heads. Money can minimize or eliminate these stresses.
Second, when spent correctly, money can actually make us happier.
You’re not going to be happy just because you’re sitting on a stack of cash or you’ve got enough money to keep up with the Joneses. However, there are a number of proven ways to spend money that will improve your happiness.
We’ll be spending the first week of May exploring the first way to buy happiness and the rest of the month on the second.
I would imagine that even the people that say money won’t make you happy would struggle to argue that a lack of money won’t make you unhappy.
It’s all well and good to say that you can’t buy happiness, but if you’re struggling to pay rent or feed your kids, you’d probably feel a lot happier if you came into some money.
Becoming happier and becoming less unhappy are two sides of the same coin. For this reason, money’s strongest effect on happiness comes from its absence.
Taking the Basics for Granted
It is easy to forget this when we are living more comfortably. We take food, shelter, and other necessities for granted quickly.
Imagine how stressed you would be if you could no longer afford to pay your rent or mortgage. This stress would seep into the other areas of your life and would slowly consume you.
The absence of this variety of day-to-day stress is the base upon which we build our happiness.
We all have stress every day, but the stress from struggling to survive is much greater than anything else we may face on a daily basis.
We tend to think of happiness as feeling good. We forget that before feeling good we need to start by not feeling bad.
Being Grateful for the Bills
Instead of being upset at bills, try to be thankful that you can pay them.
We recently received hospital bills of $2,500 for the birth of our son. This was a surprise, as I had specifically switched to the lowest deductible insurance plan available to avoid a bill that large. Alas, the health care industry is a complicated mess and our bill ended up much higher than anticipated.
But we could pay it. We could pay it in cash without having to stress about where the money was going to come from. (Although technically we paid it on a credit card and then immediately paid the card off with cash. Why turn down free cash back?) That’s a position that much of the country is not in. I am beyond grateful that we could pay the bill and go back to enjoying our time with our new baby rather than stressing about finding money.
Similarly, a few weeks ago we all paid taxes. Usually this results in a number of articles complaining about how much money the government takes from its citizens. This year it resulted in at least one article saying that we should all thank rich people for how much they pay in taxes. (Seriously. That happened.)
Instead, I try to focus on the fact that paying a large amount in taxes means that I am doing well enough that I can (and should) help my fellow citizens. We have a progressive tax system for a reason. The more money you make, the more you can afford to contribute to the common good. Appreciate how much you make and how much you can contribute.
Buying Stress Relief
We can also carry the rationale of using money to escape unhappiness a bit further than the basic necessities. Think about what other stress you could eliminate with money.
Maybe you have a stressful commute. You could pay more to live closer to work. You could build up your savings and take on a lower paying job closer to home.
Maybe you’re anxious about the prospect of losing your job. You could save up an emergency fund that would allow you to comfortably ride out a lay-off.
Maybe you’re not getting enough sleep. You could buy a better pillow. Or more comfortable bed. Or some blackout shades. Or a noise machine.
Look for areas of stress and unhappiness and think about whether money could help. You’ll be surprised how often some well-placed spending can eliminate unnecessary stress.
A Quick Note on Privilege
The majority of our exploration into the interaction between money and happiness this month will come from a place of privilege.
We will look at the best ways to spend money to buy happiness. We’ll study how to squeeze the most happiness out of our vacations and our purchases. We will explore the best uses of our discretionary spending to optimize our happiness.
But this all assumes that we have discretionary spending in the first place. You can’t have the money to buy happiness if you don’t have money. Most of the topics we cover this month will assume that you already have the money to cover your necessities and avoid the unhappiness that comes with struggling to make ends meet on a day-to-day basis.
There’s nothing wrong with having the money or the opportunity to explore this topic. I am not suggesting that we need to feel guilty. But we do need to recognize that we are already lucky and have a head start on buying our happiness.
Practice gratitude and exercise empathy. Recognize that you are in a position to help others.
Join the Conversation!
What do you think? Do you agree that happiness can be bought? Have you made any purchases that made you happy or got rid of some stress or unhappiness? Let us know in the comments!