In the grand scheme of things, money is just a tool and net worth is just a number. After all, the monetary system we know today is relatively young compared to the history of the world. We humans are simply seeking a fair way to reward our efforts of improving the world we live in.
When working through the years and saving up our hard earned dollars, the top priority should be to create a happy life. Life is short and working only for the sake of making more money will leave one empty handed when their day comes.
The real goal should be to use the money we do work so hard for in order to create as happy of a life as we possibly can. In the book Happy Money: The Science of Smarter Spending, Elizabeth Dunn and Michael Norton explore this very idea. How can we use money to create a happier life? They found five main ways.
1. Buy Experiences
The millennial generation gets a hard time in the press, as we are constantly berated for our habits of traveling, eating avocado toast, and drinking expensive coffee. However, one thing that the millennial generation believes in is buying experiences over owning things. According to Dunn and Norton, this is an incredibly effective way of using our money to increase our happiness.
We have witnessed generations before us purchase and hold onto far more items than can fit in the house and a separate storage unit. Buying experiences gives us a lasting memory that brings far more happiness to our lives than another pair of shoes ever will.
“The experience brings you together with other people, fostering a sense of social connection.”
2. Make It a Treat
If you commute to work every day, there’s a pretty good chance that you drive by a Starbucks. There’s an even better chance that that Starbucks drive-thru line is packed with cars. I’m not here to tell you that you need to cut out the daily latte. In fact, I believe there are far easier ways to create massive room in your budget, while still enjoying your coffee habit.
However, it should be known that the special coffee drink you have may not be making you as happy as it once did. Human beings adapt very quickly to new habits and routines, including the coffee we consume. When we get used to having a special coffee every single day, we don’t have the same spikes in happiness as we’d like.
In order to combat this, one should forgo the daily latte and make it a treat instead. It can be as simple as this - drink a regular coffee Monday thru Thursday, and save the latte or special coffee for Friday. This way, you’ll be able to look forward to the special treat all week long, which is what really brings the happiness. It’s not always the event itself, but our anticipation of the event, that makes us happy.
3. Buy Time
Are there any regular chores that you absolutely hate? Whether they be vacuuming, mowing the lawn, cleaning the shower, or anything else - outsourcing may be the answer to increase your happiness.
Very few of us have much free time, or so we think. What if a few of the mundane tasks in our life were outsourced in order to create time? We could use this newfound time to be with our family, take a hike at the nearby trail, or have a night out with friends.
However, it’s my opinion that everyone should do a hard audit on their schedules before complaining about not having any time available. We are notorious for claiming we are far busier than we really are. In fact, Dunn and Norton state that Americans on average spend about two months per year watching television - that’s about 4 hours per day!
4. Pay Now, Consume Later
Another simple way to increase happiness is to adjust when you pay for things you already enjoy. It has been found that when we pay for our goods or activities beforehand, we free ourselves up to enjoy the purchase much more. If we don’t pay until later, the expenditure hurts our happiness levels more.
For instance, the perfect example is going on a vacation at an all-inclusive resort. If you’ve ever been, you know that there is no hesitation to ordering that cold drink while sitting by the pool or on the beach. It’s free! Well, kind of.
When we pay for goods or services up front, it allows us to stop worrying about the money and just focus on enjoying what we paid for.
5. Invest in Others
If you’ve ever given to charity, monetarily or with your time, you have probably felt the good feelings that come along with it. This is a wonderful way to boost not only your happiness, but the happiness levels of your community as a whole.
In a simple research study, participants were each given $20. However, some of the participants were instructed to spend the money on themselves, while a separate group was instructed to spend the money on someone else. It shouldn’t be a surprise that the group that gave their $20 to others reported greater levels of happiness after the task was completed.
This can be done in everyday life by buying someone a coffee, talking to someone who needs a companion, or donating your time and efforts to a good cause. Investing in others is a sure way to increase your personal happiness.
Challenge For This Week
Having learned all of this, I want to challenge you to spend your money to increase your happiness levels in as many ways as possible. For example, what if you bought a Starbucks gift card today (pay now, consume later), used it on Friday to buy a special kind of coffee (make it a treat), and also paid for the drink of someone else in line (invest in others)? That is a sure way to make this week a happy week.