buy happiness

Best Money Tips: How to Buy Happiness

Amy Lu — Thu, 14 Apr 2016 10:01:09 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found helpful articles on tips and tricks for buying happiness, places that pay you to live there, and trash that you can actually sell.

5 Ways Money Can Buy Happiness

Ben Edwards — Sat, 30 Oct 2010 17:00:09 +0000

I think we can agree that the pursuit of money won’t make you happier. However, in my experience, if it’s spent the right way, money can help you enhance the things in life that do make you happy. Here are five things I’ve spent money on that could help raise your happiness index.

Saving Time

One of my favorite things about our modern economy is how specialization means you can find an expert to help you out with almost any problem you run into. As you can probably tell from my Angie's List review, I’m a big fan of the service and have used it to hire contractors for many big jobs around the house.

If you can pay someone to do a job in a few hours that would have taken you most of the weekend, that’s money well spent in my book. Of course, you have to balance the costs against the time saved and what you do with your re-claimed time.

In my case, I’m not particularly great with home improvement or maintenance work, so the time and money I save by hiring an expert more than pays for the expert's fee. I typically spend my re-claimed time hanging out with my kids, then working on my online business once they’re in bed. To me, that’s a better life investment.

Saving Money

If you can spend money in order to save money within a reasonable payback time, then you’ll come out ahead.

So how can saving money make you happier in life? One good example is refinancing your mortgage. You’ll have to pay hundreds or even thousands in fees and closing costs, but refinancing can free up tens of thousands of dollars that would have been spent in mortgage interest over the next 15-30 years. The money you save in interest can be used to go on vacation, help send your kids to college, retire early, or spent on whatever you’re passionate about in life.

Making Money

I’ve spent a lot of money over the years learning how to improve my investments, career, and business.

On the low end of the price spectrum, you can pick up a lot of great actionable information simply from reading books. If you’re willing to spend a little more, you can buy courses or tools to help you learn or give you an edge. On the high end, you can get personalized assistance by hiring a coach or going back to school.

If you can learn to make money more effectively and/or more efficiently, then you can reduce the number of total hours you spend focused on money and use that time doing other things you enjoy.

Providing Protection

I definitely don’t enjoy paying for insurance, but having coverage to protect my family against the financial challenges of catastrophic events can certainly help me sleep better at night. I’m not using that as a figure of speech either. I’ve experienced first-hand how the strain of worrying can have an impact on your health, your relationships, and your ability to sleep.

There are, unfortunately, plenty of opportunities to spend more than you really need to on insurance, so shop carefully. Having at least a minimal level of coverage to guard against the worst case can give you the security you need not to worry.

Insurance is the most obvious example of providing protection, but it can also be something simpler like buying your teenager a cell phone so they can call you in an emergency.

Making Informed Decisions

Big decisions make us uncomfortable before we make them, when we make them, and after they're made. Not only do they stress us out while we're trying to decide what to do, but we also have to live with the results of our decisions.

Some decisions have larger consequences than others (for example, remodeling your house versus planning your retirement). But all big decisions have one thing in common: risk.

The risk of picking the wrong paint and carpet when you remodel your house is that it could end up looking terrible. The risk of planning your retirement yourself is that you may put yourself in unnecessary financial risk, pay more taxes than necessary, or overlook opportunities.

The scope of both risks is different, but they each have associated costs. The cost of bad decorating is you can either pay to have it redone, or decide to live with it and worry about it someday when you sell your house. The cost of poor retirement planning is that you have less money when you reach retirement age.

My wife and I paid money to help reduce our risk when we made both of these decisions. The $50 we paid the interior decorator to give us feedback on our home remodeling was much cheaper than paying to have the paint/carpet redone, and the few hundred we paid a financial planner to review our retirement investments right after we got married was more than paid for by the long-term impact of the advice she gave us on tax issues and diversifying.

How does this make us happy? In terms of remodeling, we're very pleased with the way it turned out. We didn't have to pay money to re-paint the house, and I don't have to console my wife about the ugly carpet for the next 10 years. And even though our nest egg takes a hit when the market stumbles, our diversification definitely helps to cushion the fall and makes us feel secure we’ll have the money when we're ready to retire someday.

What's Your Take?

Can you think of any other ways that spending money can help make you happier? Or do you think you can't "buy happiness" and that the pursuit of money is the root of all evil?

This article is from Ben Edwards of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Does Money Really Buy Happiness?

Janey Osterlind — Tue, 21 Sep 2010 13:00:12 +0000

"A large income is the best recipe for happiness I ever heard of," the novelist Jane Austen once said. And, as it turns out, Austen may have been right — to an extent. A recent study (via Reuters) indicates that increasing one's income up to about $75,000 per year lessens life's stresses. (See also: 5 Ways Money Can Buy Happiness)

In other words, more money up until that point allows one to buy things that increase emotional well-being. For example, if I increase my salary from $35,000 to $75,000 per year, I would be able to save for retirement, afford my medical prescriptions without a great deal of stress, and hire a cleaning lady so I could spend more time with my children. (This is all theoretical, of course. I have no children, so no great need for a cleaning lady — yet!)

Whether money makes you happier also depends on your income in comparison to your peer group, rather than your ability to buy more things. Researchers Firebaugh and Tach argued in their paper, Relative Income and Happiness: Are Americans on a Hedonic Treadmill?, that this results in a never-ending comparison game, because one's income tends to rise with age (as does the rest of the peer group). It also means that as first-world countries grow wealthier, their residents aren't likely to be any happier, on the whole. Firebaugh and Tach did find that the greatest predictors of happiness were physical health, income, education and marital status.

Firebaugh and Tach's argument that there is no single predictor of happiness was recently supported by the results of a recent Gallup World Poll (via Web MD). The poll, which surveyed 136,000 people in 132 countries, found that happiness is determined by numerous factors, including expectations and culture. In other words, the question of whether you are happy depends in large part on how you define "happiness." The survey also found that the United States had the highest income of all the countries surveyed, but ranked 16th in life satisfaction (related to factors like feeling respected, having autonomy and having job fulfillment) and 26th on positive feelings.

In addition to there being numerous predictors of happiness (rather than income alone), there is evidence that money does not make you more generous. In fact, US families making over $300,000 annually donate just 4% of their income to charity and numerous other studies have shown that lower-income families give more of their income to charity than do high-earners.

So what does all of this mean? Bottom line: having enough money will make you happy, but having more money won't necessarily. My view is that it's essential to define happiness for yourself and then allocate your money in ways that will make you happy. In my case, what would make me happiest is being able to save 10% for retirement (which I do), having six months of emergency funds (which I don't) and paying off my credit cards (which I'm in the process of doing). After that, I'll be free to allocate money toward travel, which is one of my great loves in life! What about you? How do you view the relationship between money and happiness? Share your thoughts!

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This article is from Janey Osterlind of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Can't buy me love...but maybe I can buy happiness

Sarah Winfrey — Tue, 24 Apr 2007 18:22:47 +0000

Gretchen over at The Happiness Project claims that money can buy some forms of happiness. Her experience in buying some books she loves that will continue to give her a jolt of happiness whenever she sees them is a powerful argument against the old adages about not buying happiness. Having had similar experiences, this is very compelling. Whether or not it works for you depends on your personality, your spending habits, and what exactly you're expecting the money to do for you. But you don't need me to tell you all of this, because she said it first. Head on over and check it out.

This article is from Sarah Winfrey of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: