I’ve been rich and I’ve been poor—and believe me, rich is better.
–Attributed to Sophie Tucker, Pearl Bailey, Mae West and everyone who’s ever been both rich and poor.
Uh, Greg, I think you’ve been watched the movie, Wall Street, one too many times. Or, maybe you’ve taken one too many hits on the noggin. Everyone knows money can’t buy happiness. People who chase the money end up empty in the end.
I agree with you to a point. If you think earning a ton of money and buying a bunch of things will make you happy, you will eventually end up disappointed.
But, money can do a lot of great things for you and the people you love. It can be a great motivator if it’s for the right reasons and doesn’t become more important than the process you’re using to earn it.
I’ve never been truly poor. I’ve never had to worry about having enough to eat. However, when my wife, Anne, and I were just starting out, we weren’t making a lot of money. We had a couple things go wrong and we weren’t exactly rolling in the dough.
I will never forget the day she called me sobbing. Anne’s not overly emotional or given to crying at the drop of a hat, so I instantly thought something horrible had happened. She explained through tears that she was visiting our friends at the beach, parked where she thought it was ok, and got a ticket. Anne felt horrible because she knew with our financial situation we couldn’t afford to waste money.
It was a $12 parking ticket. That’s it. Our income was so low that a $12 ticket was enough to make her cry.
We laugh at that story now, but it reminds us that there is nothing great about being poor. It makes everything you want to do harder. It puts stress and worry on you that make your daily life tough.
People who say money can’t buy happiness are right and wrong. I agree that trying to buy happiness by acquiring things is a fool’s game. But if you don’t think you’re happier knowing you have enough money to eat and pay all the bills at the end of the month, you’re crazy.
Quite a bit of research now shows that as we earn more income our happiness increases – up to a point. The debate is about the level where increased income no longer has a corresponding impact on our happiness. The latest studies I’ve seen claim the effect holds true until you reach the top 10 percent of income earners.
In the book Happy Money: The Science of Smarter Spending, Elizabeth Dunn and Michael Norton explain some of the ways money really does buy happiness.
1) Buy Experiences
When we buy experiences instead of things the result is a bigger, longer lasting feeling of happiness.
The memories from a fantastic trip to Europe will stick around much longer than the feeling you get from that new-car smell. You can tell those stories from your European trip for years and each time they will bring a smile to your face, especially if you made those memories with your friends or family.
There is a caveat, though. You need to buy the kind of experience that you actually like. I love going skiing. Spending money on a ski trip will definitely move me up the happiness scale. But I’m not a ballet or opera guy. If I get dragged to one of those events and I’m paying for it, not only will I not be happy, I’ll probably be a bit grumpy.
2) Buy Time
Buying time increases your happiness. When we spend to keep our free time for what we want to do, that pays dividends. Paying for a maid service, for someone else to mow your lawn, or paying extra for your home or apartment in order to shorten your daily commute have all been shown to move you up on the happy scale.
3) Buy Freedom
Imagine having time, location, and financial freedom to live the life you want. That could buy some happiness, couldn’t it?
Imagine having enough money to do what you want, when you want. To live where you want, work only when you want – on what you want, and having time to volunteer where you want. Imagine having enough money so you can help whoever you want, and to have the ability to spend time with whoever you want – doing what you want. Imagine taking whatever vacations and trips you want with your family and friends.
One caveat: If you’re not careful, you could spend your whole life as a slave to money in an attempt to earn enough to someday be free. What if someday never comes? What if you’re too old to enjoy it when it does? What if you’ve given up too much to get your someday?
It’s a balancing act for sure. The key is to earn the money doing what you love while serving others. Tough to go wrong when you do it that way.
4) Give It Away
Some research shows that when you give as little as five dollars to a charity, or to someone who needs it, your happiness level goes up more than when you spend it on yourself. I know that’s true for me.
Giving away your money for happiness doesn’t just work when you give to charities, churches, or people who really need it. Believe it or not, picking up the tab when you go out with your buddies gives you a little jolt of happiness. (And I’m willing to allow you that happiness if we ever go out for drinks together.)
Think back to a time you donated to a good cause or a friend who needed help. Still feels good, doesn’t it? Make it a goal to increase your giving and increase everyone’s happiness.
Money Doesn’t Make You Mean or Nice
There are nice rich people and mean rich people. There are also nice poor people and mean poor people. The money doesn’t make the person. More money tends to make you more of what you already are.
Most people do not become rich by exploiting others or by acting like jerks. Most people make more money the more they serve others. That’s a good thing for everybody.
I like not having to worry about where my next meal is coming from, don’t you? That’s a start, but I like to take inspiring vacations with my family and make lifelong memories. I enjoy living in a beautiful home and eating out at nice restaurants. It’s a wonderful feeling to be in a position where you are able to donate to your church, charities, and people in your neighborhood. Making more money isn’t just OK, it can be what allows you to do all the other things you’ve been dreaming about.
So, go ahead and buy some happiness – and help others buy some too.