NOTICE: This is not financial advise and is only a discussion of ideas.
Does money buy happiness?
For many of years the question, does money buy happiness? has been thrown around. And for the most part people have agreed that, no, money does not equal happiness. But are they right. I believe that if money doesn't buy you happiness, then you are spending it wrong.
Experiences VS things
When we spend our money on materialistic things such as a new handbag, some nice clothes or even that overpriced hair dryer (you know the one), we feel joy and we believe these objects will bring long term happiness as they last longer than going to a concert or taking a weekend trip to Rome, this is an example of consumerism. However, studies have shown it is the opposite. Shortly after the purchase of a 'thing', whatever it may be, our happiness levels out back to our baseline. This is because we get used to it being around, it's just another 'thing' and no longer special.
An experience, on the other hand, can bring much more happiness over time. Picture this, you're having a delicious lunch with some friends who just got back from travelling and they are telling you these amazing stories of their adventures, with huge grins on their faces, while you sit there thinking about how cool your new phone is because its battery life is 20% larger than your previous phone. Who do you think is happier? Experiences aren't short-lived, they are memories to look back on, stories to be shared and feelings of happiness to cherish for as long as you can remember them.
What is an experience?
Experiences can be anything that you do. They don't have to be expensive holidays to Dubai or tickets to a festival, although they do sound quite fun. Happiness can be experienced when spending time with loved ones, having a coffee with a friend, or even learning a new skill. You don't need money to be happy, but having money can buy you the experiences that make you happy.
Spending on others
Money can also buy happiness for when giving to others. Let it be a gift to a friend, donating to charity or picking up the bill for brunch. Your money can buy happiness for others. Your generosity has made someone feel special and you yourself feel good about it. Giving is a double-edged sword, where the blade is slicing a bag of joy that brings happiness to both parties. It doesn't matter how much you give as a little can go a long way. Spending on others is a great way to buy happiness as it can be a buy one get one free kind of deal.
Financial security
It's important, when talking about money, to educate people on financial security. Especially when it comes to happiness. A 2010 study by Daniel Kahneman and Angus Deaton suggests that peoples happiness increases alongside their income up until $75,000, at which point it starts to decrease. This can be for a number of reasons for example increased stress from a high paying job. So, maybe money doesn't buy happiness, but financial security does?
The study clearly highlights that those who are struggling financially are not as happy as those who are financially secure. This I believe to be an obvious conclusion and we don't need a study to prove it. However, the facts don't lie so here are some tips to help you become financially secure.
Budget - Only spend what you need to. Don't spend money on things you do not need.
Save - Save enough so that you can survive a life changing event such losing your job. Many have agreed that around 6 months of living expenses is ideal.
Invest - Let your money make you money. Education, start a business, stocks and shares, real estate. Make sure you speak with a financial adviser first.
How can money buy happiness?
Well, although studies have shown time and time again that money doesn't solely dictate how happy you are, it diffidently plays a crucial role. Happiness is something we all strive for and yet none of us can fully achieve as life is full of its ups and downs, most of which is out of our control. But money, the all-powerful tool of transactions can indeed to an extent buy happiness through experiences, through giving and through peace of mind.