Money canâ€™t buy you happiness. Itâ€™s an adage reminding us the important things in life arenâ€™t things. And it’s often repeated in times of financial stress or upheaval.
But itâ€™s only true to a point. A 2010 Princeton study by Angus Deaton and Daniel Kahneman found money can buy life satisfaction, for a while. They found emotional well-being increased along with salary until about $75,000 annually. At that point â€“ after necessities like food, clothing, shelter and transportation were no longer everyday stressors â€“ emotional well-being didnâ€™t continue to climb. The upper middle class have as many problems as the uber-rich, stemming from relationships, time management, health and other universal factors.
For people looking back on their lives in retirement, those who earned more money reported being more satisfied with their lives, without limit. “We conclude that high income buys life satisfaction but not happiness, and that low income is associated both with low life evaluation and low emotional well-being,â€ the study found.
Spending on Making Life Easier
A more recent maxim backed by science is that spending your money on experiences rather than material possessions increases happiness.
That was the conclusion of a 2009 study by Ryan Howell, assistant professor ofÂ psychologyÂ at San Francisco State University. “As nice as your new computer is,â€ he said. â€œIt’s not going to make you feel alive.â€
One of the reasons for this, according Dr. Thomas Gilovich, a Cornell University psychology professor, is because the shine wears off material possessions quickly. This isÂ especially true in an era when new technology makes old obsolete as fast as you can buy it. â€œWe buy things to make us happy, and we succeed. But only for a while. New things are exciting to us at first, but then we adapt to them,â€ said Gilovich.
And buying â€œexperiencesâ€ doesnâ€™t just mean concert tickets, guitar lessons or a Caribbean cruise. A recent Proceedings of the National Academy of Science study notes spending money to save time makes people happier. Purchasing services such as a house cleaner, lawn care or food delivery increases quality of life. Itâ€™s the best way to buy back free time to spend with friends and family.
Spending Time With Loved Ones
Most importantly, some researchers believe the largest reason spending money in these ways bring more happiness than things is because they involve the people we care about. “When people spend money on life experiences, whether they also take someone with them or buy an extra ticket or whatever, most of our life experiences involve other individuals,” said Howell.Â
Spending on Peace of Mind
It makes sense, then, that one of the best investments you can make is life insurance. If more financial security causes people to look back on their lives with more satisfaction, and one of the best ways to spend money is on experiences and services that allow us to be with the people we love, consider the peace of mind it brings to know those people will be taken care of financially after youâ€™re gone.
By purchasing life insurance, youâ€™ve investing in peace of mind for yourself and your family. You essentially buy yourself and your loved ones the gift of security. Beyond that, youâ€™re free to enjoy experiences that will live on as memories forever.
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