Can Money Make You Happy?
Jean Jaques Rousseau, a notable French philosopher, challenged his readers’ idea about the role money played in their lives. He said, “money can buy material things, but real happiness must be truly earned.” He is credited with the earliest written form of the phrase money can’t buy happiness.
But is that sentiment true? It turns out, Rousseau knew a thing or two about the role money plays in our lives. Happiness is ephemeral— it’s a state of mind whereas joy and peace are enduring. However, seeing life through that lens can be difficult when there is a pandemic and bills to pay.
It’s completely normal to be worried about money, but oftentimes we allow those worries to dictate our lives. How can you change your perspective on the role money plays in your life? Let’s take a look at a few examples.
Stop chasing the idea of “enough”
It’s so easy to get wrapped up in the idea of finding “enough” money. But we will let you in on an insider secret: there will never be “enough.” Even if you win the lottery, that number won’t necessarily be able to satisfy you forever. Some people think that they will have enough when they finally get a raise or make a certain salary, but that may only satisfy you until you get another raise or a better bonus or a more coveted parking spot.
Given the opportunity, you could always find more things to spend money on or develop a new object of your attention. If you’re a particularly competitive person, you may feel the need to be that one step above your coworkers, friends, even family.
Commonly cited research suggests that people tend to feel happier the more that they earn up to about $75,000. After that threshold, the happiness trend went down. Why is that? Well, we need money for the basic necessities of life: shelter, food, water, and healthcare. Once those areas are taken care of, our emotional well being is satisfied.
No matter how much money you may have, the same question is still top of mind: do you know who you are? A $2 million salary can’t answer that question for you, so it’s important to redirect your energy to align your money with your personal and financial goals.
Alter your money mindset
Your ‘money mindset’ informs your attitudes, opinions, views, and emotions about your money — it can also affect those that are closest to you.
How do you approach your finances? Do you feel comfortable talking about money with your spouse, friends, or co-workers? If you’re not comfortable, what’s holding you back? For many people, money was a topic that was always kept a secret, and that energy feeds into adult life.
It’s critical to know that money is not a taboo subject — it should be spoken about freely and openly.
Challenge yourself to move from a scarcity mindset (never enough) to an abundance mindset. Focus on all the things you do have instead of narrowing in on the things you don’t.
Money is a tool, not a goal
This can be one of the hardest concepts to grasp. Money isn’t your end goal — it’s not the ultimate destination, rather it’s simply a building block to help you get there. Take some time to come back to your financial goals.
What are your goals? Are you hoping to move to the beach, set up a 529 plan for your grandchild, or start actively volunteering? The final destination here isn’t money, money just helps bring these goals and ideas to fruition.
Money isn’t and can’t be absent from your goals — it just shouldn’t be the primary focus. When you stop focusing solely on the money aspect, your values and goals can take top priority. Happiness comes from being able to live out your values and achieve your goals.
Give generously
When you give back to the community and organizations that you’re passionate about, you feel happier. Giving doesn’t always have to be monetary. While charities rely greatly on monetary donations, the backbone of many of their efforts relies on volunteers. More often than not, time is equally, if not slightly more important, than money.
When you decide on the organization(s) you want to support, try to give throughout the year. Most donations come in during the holiday season and giving during other months of the year can prove extremely helpful.
Make it a priority to build charitable giving into your financial plan. Decide on the amount you’d ideally like to give and talk it over with your financial advisor. Depending on the situation, you may be able to give more than you thought you could, or possibly less.
Giving can also help you live longer! A study by Carnegie Mellon University showed that people who volunteered less than 4 hours a week were 40% less likely to develop high blood pressure than those who don’t. Who wouldn’t jump at the opportunity to live a longer, happier life?
Happiness starts with a goal and a plan
Can money make you happy? Sure maybe for a short time, but true happiness comes from living life according to your values and finding meaning in each day.
Start by realigning your priorities. Put your values and goals at the center of your financial plan, and let all the other pieces come together.
At Step by Step, our top priority is to set you up for success by helping you achieve your financial and personal goals. Take the next step in prioritizing your goals and happiness and give our team a call today.