I do not believe there is a direct correlation between money and happiness. Some of the richest people in the world are not happy; they can never have enough. Some of the happiest people are those who follow their calling and do not have a dollar to their name. However, the book Happy Money, The Science of Smarter Spending gives some sound advice based on research on ways you can use money to help create happiness in your life.
We all think we know how to spend our money in ways that create happiness in our lives—but do we really? Based on the book Happy Money, here are five principals that can help you turn money into happiness:
- Buy Experiences, Not Things. I recently heard a story about a family who lived in the projects. With what little money the family did have, the father insisted on traveling around the U.S. I found it odd this father would rather travel the U.S. than purchase different housing. However, what the daughter telling the story remembers most from her childhood is the times when the family was traveling. Will the biggest, newest TV, house, or car bring you memories for years to come? Now I do believe there are things we purchase that can provide the experiences. For example, my family had a small boat growing up, and some of the best memories I have as a child is riding the waves on that boat. The boat was not new, nor was it big, but it provided wonderful experiences.
- Make it a Treat. If you grab a latte, candy bar, ice cream, or glass (or two) of wine on a daily basis, it is highly likely you will appreciate them less over the long term. However, if they are a treat and you only access them on special occasions or as a reward, then you are less likely to take them for granted and more likely to appreciate them.
- Buy Time. While we are all blessed with a different amount of money to use wisely in our lives, we are all given the same amount of time each day. What in your life do you hate doing the most? Cleaning, yard work, car maintenance, and the list goes on. What would you do with your time if you paid someone to do those tasks for you? You could have more family time or me time, hang with friends, volunteer, and the list goes on for the things you could spend your time on enjoying, rather than dreading.
- Pay Now, Consume Later. America likes to consume now and pay later. However, there is something to be said for saving to reach your goals. Many parents give their children an allowance; these children have to save and save and save to buy a bike, video game, or other toy. They reap the rewards of saving and then consuming. Versus if we spend the money before we even earn it, we reap the dread of paying another bill each month. Less debt leads to less financial stress and more happiness.
- Invest in Others. Giving is truly better, and there is research to prove it. When you invest in others it provides more happiness than spending the money on yourself.
The next time you want to buy a new pair of shoes, designer purse, latte, or other material item, ask yourself if it will truly lead to more happiness.
Written by: Melissa Stewart is a CERTIFIED FINANCIAL PLANNERTM practitioner and Financial Advisor with the VanderWeele Stewart Group of Raymond James. She speaks at local events and is passionate about financial education in the community. Visit www.vswealth.com to learn more.
Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNERTM and federally registered CFP (with flame logo) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.
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