The Surprising Research about Money and Happienss Part 2

The Happiest Place on Earth

It is important to keep in mind that no amount of money - nor lack of it - can determine one's emotional state. While those living in poverty may be less likely to see themselves as happy, there are plenty of exceptions.

The World Database of Happiness, which measures the levels of happiness found in various nations according to a certain set of standards, often finds countries such as Costa Rica, Puerto Rico, and Mexico ranking above more affluent countries.

In 2014, a WIN/Gallup poll surveying people in 65 countries found that residents of Fiji were far and away the happiest people on earth, according to an ABC news article. In spite of average incomes well below $15k in US dollars, a whopping 93 percent of respondents said that they were either happy or very happy. (Only 67 percent of US respondents made the same claim.)

Lynne Twist, author of The Soul of Money, argues that our experience of scarcity is fundamentally contextual. In other words, we tend to base our determinations of what is "enough" or "not enough" by comparing our situation to that of others.

A 15-year old middle-class American girl in an upscale neighborhood may live like a king or queen compared to a 15-year old in Fiji, yet in her consumer-based culture, she may feel deprived if she can't spend spring break in Hawaii or upgrade to the latest smart phone. Meanwhile, a school child in Fiji with a much lower standard of living may feel extremely content with life in a culture in which singing, dancing, and celebration are a way of life.

You Really Can Buy Happiness!

Regardless of income, research has shown that those who spend in certain ways find greater levels of contentment. Apparently, to spend your way to happiness, you should follow these rules of thumb:

1. Purchase more experiences, less "stuff."

Research from Dr. Thomas Gilovich of Cornell University reveals that spenders experience more long-term happiness and satisfaction when they buy experiences rather than possessions. A new watch or necklace increases happiness for a short while, but it soon becomes a routine part of the purchaser's environment, contributing little to happiness and possibly even inducing buyer's remorse.

However, dinner with friends, a Broadway play, or an Alaskan cruise creates valuable memories shared with others. Connection creates meaning, and we're more likely to bond with someone who also hiked the Appalachian trail than someone who purchased the same television.

2. Buy time. 

You've heard that "money is time," and spending money to create more time is another expenditure that tends to raise happiness. If a promotion guarantees a higher income yet a much longer commute, it might not be a good deal. Not only is time a valuable non-renewable resource, but the more time you have, the more experiences you can enjoy!

3. Spend on others. 

Studies by the Chicago Booth School of Business and the University of British Columbia found that people experienced more happiness when they spent money on others. The emotional rewards of social spending such as donating money to a food bank were even tracked on MRI scans in a University of Oregon study, according to a WebMD article. Whether treating someone else to an experience or helping another - including giving to charities - it appears that money is best shared.

4. Save your way to happiness!

According to a survey of 1025 adults conducted by Ally Bank, the more money people have in savings, the happier they are! Those with savings accounts were 31% more likely to rank themselves as "extremely happy" or "very happy" than those without savings accounts. A notable 57% of those with $100,000 or more in savings describe themselves as "very happy" or "extremely happy," compared with only 34% of those with less than $20,000 in savings.

Those surveyed counted among the benefits of saving the ability to "face the unknown" (92%), "feel proud" (84%), "feel independent" (84%) and "realize life goals" (78%). The majority of participants (84%) ranked having money saved as more important to their sense of well-being than eating healthy foods, getting regular exercise, and having an enjoyable job.

Are you ready for more happiness?

We're here to help raise your satisfaction and your savings! Contact me today, I would love to assist you with financial strategies than allow you to live, save and give in ways that give you joy and fulfillment.