It is said that money can’t buy you happiness but as with all simple question or statements it depends on a lot of variables.
Once you have satisfied your basic needs food, clothing, shelter having more money doesn’t necessarily buy you happiness. One study famously found that people who had big wins on the lottery ended up no happier than those who had bought tickets but didn’t win. One way of accounting for this is to assume that lottery winners get used to their new level of wealth, and simply adjust back to a baseline level of happiness, something called the “hedonic treadmill”.
Another explanation is that our happiness depends on how we feel relative to our peers. If you win the lottery you may feel richer than your neighbours, and think that moving to a mansion in a new neighbourhood would make you happy, but then you look out of the window and realise that all your new friends live in bigger mansions.
But the deeper mystery is why we’re so bad at knowing what will give us true satisfaction or happiness in the first place. But it turns out money can buy you happiness, if you spend it the right way.
If I gave you $100 on the condition that you had to spend it on something that would make you really happy. What would you do with the money? Some people might go shopping, others would treat themselves to dinner out, a few might even donate to a worthy cause. But what about using that $100 to buy yourself more free time?
People who buy time by paying someone to complete household tasks are more satisfied with life. Across a range of incomes, careers and countries, timesaving purchases are correlated with less stress and more positive feelings. Working adults report higher life satisfaction if they regularly paid to outsource household tasks such as cooking, shopping and general maintenance.
Comparing different days when they bought items or purchased time, most study participants reported that their timesaving purchases were accompanied by an increased positive effect, a decreased negative effect and less time stress. Yet research shows very few individuals think to spend money in this way.
Only a small percentage 2% would spend $100, to buy themselves more time. It is shown that “people don’t spend their money to yield the greatest happiness.” Most adults feel they are short on time, cite the same as a reason for anxiety, insomnia and even obesity. So why are we so reluctant to consider investing in time capital?
The abstract nature of time may be to blame. We always think we’re going to have more time tomorrow than we do right now. So, we’re hesitant to trade money, which is concrete and measurable, for time, which is much more uncertain. When you pay someone to clean your house or mow your lawn, you know exactly how much money you’re losing. The happiness you’ll gain is harder to put a value on.
If you look at studies on how to buy happiness, you will find evidence supporting several other ways beside buying time to increase happiness. Buying material goods, that match our personality, or satisfy our need for expressing our identity. Spending money on others which fulfils our desire for human connections. Buying experiences has repeatedly been shown to increase happiness. Especially beneficial are experiences that help us develop new skills or apply our talents in novel ways and make us feel more confident.
There’s no magic answer for how to achieve maximum happiness, but for many people, spending money to save time and improve well-being isn’t even on their radar. So, as you contemplate your next material purchase take a second, pause, reflect and ask yourself what would really make you happier.
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