Do You Really Need Money to be Happy? (How’s Your Relationship with Money?)
People have spent a lot of time around money. People want it, need it, work hard to earn it and also obsess about it. There are those who regret how they have spent their money and wish that things could be a little different. And then of course, there are those who are unable to move on until they have amassed wealth.
People’s #relationship with money has a lot to do with how #happy and content they are in life. It doesn’t matter how much or how little of it you actually have, but more of how you behave around money. According to Psychology lecturer and broadcaster Claudia Hammond, people need to better understand their relationships with money in order to better understand how it’s affecting their behaviour as well as how they think.
How Do You Relate #Money and Happiness?
More money doesn’t equate to greater #happiness. Researchers have studied the lives of lottery winners or those who have suddenly landed a windfall. Surprisingly, people’s happiness can’t be equated with how many zeroes they have in their bank accounts.
There is a four-decades old study that looked at the lives of lottery winners, people who have been paralyzed, and a group who had no change in their circumstances. After a year, the group of lottery winners weren’t any happier than before they got all that money. So it was clear that the new-found wealth did nothing to bring them real happiness.
Over the years, additional research have proven that as money comes and goes, a person’s level of happiness remains the same.
According to the esteemed psychologist: “The people with more money are, on average, happier than the people with less money. They have less to worry about because they are not worried about where they are going to get food or money for their accommodation or whatever the following week.”
However, she was quick to note that other than sustenance or providing for basic needs, people have overly estimated the #happiness money brings. So it’s not true that the person with a higher salary is ultimately happier than the person with a lower salary. He may be happier in terms of compensation, but this does not apply to his entire quality of life.
So how can you make money for you?
Spend Money on Experiences
Hammond reiterated that going on a buying spree may improve a person’s mood for a while but it does not keep you happy for the long term. The psychologist advised spending more on experiences rather than collectible items. There are people who collect expensive cars, watches, designer bags and many more. However, experts noted that this only brings temporary happiness.
A better alternative would be to spend a weekend with your family. Travel to the beach, go to a resort or have a staycation. You can also go camping, hiking or have a retreat. These are the things that create wonderful memories for everyone. And yes, money can buy you these things, but the experience that comes as a result of it is priceless.
“Experiences make us happier because we anticipate them beforehand, we think about them, we imagine ourselves in that situation,” Hammond said.
There are some exceptions to this rule though. For example, buying a new bike or walking shoes so you can walk on trails or hike. It’s about considering the value of the experience and not the amount of money used. Buying a new bling, more designer bags, or blowing money off on a night on the club isn’t nearly as valuable as finding yourself in a trip to Kathmandu or the Himalayas.
Cash or Charge?
A lot of people don’t realize that they buy a lot of things they don’t need or really like because they pay for it by credit card. According to researchers, people who count the bills manually are less likely to go on impulse-buying spree than those who use their credit cards.
However, it’s not just gadgets, appliances, clothes, shoes or make up that are bought on impulse with credit cards. Food, the unhealthy kind, is also bought more often using credit cards. A recent study in America monitored supermarket shopping behavior for a year. They looked at people who paid in cash and studied what people using credit cards spent more on. Surprisingly, people who used their credit cards spent more money and bought more unhealthy snacks than those who paid for their purchases in cash.
Hammond theorized that this could be because paying by credit card doesn’t feel like real spending. Additionally, the calories and junk food did not feel real as well because they were being paid for by plastic.
BUT Cheaper Isn’t Always Better
In analysing people’s relationship with money, the psychologist also noted that always scrimping and buying cheap stuff isn’t good as well. For example, when it comes to medicines like pain killers, going with the more expensive brand may be more beneficial than buying the cheaper one.
“Even though it contains the same ingredients in the same quantities as the generic versions, in experiments people tolerate pain better when they take the branded stuff,” the expert said.
The same thing applies when buying furniture, shoes, or everyday items. If you buy the cheap heels, you could end up breaking them after a day, causing you buy a new one again. Whereas, if you invest in a good quality pair, it can last you for months or even years and be worth every penny you spent to buy it.
Think of this the next time you go shopping for a bed or a rug. There are some things that you need to spend on because of the quality and workmanship.
Overall, spending money is about balance and restraint. You have to let loose in some instances and then rein in before you go overboard. When it comes to money and happiness, there is still a lot that people have to learn and understand.
Money can buy you a great bed and the most comfortable mattress but it can’t buy you a peaceful night’s sleep. Don’t let money take control of your life. Spend wisely on the things that matter.