The saying “more money, more problems” isn’t exactly true.
Research supports the idea that the correlation between money and happiness has more to do with how you spend it. Financial experts say being able to understand and distinguish what is actually worth spending your money on is the key to increasing your happiness. And it’s not about acquiring more stuff, like a new car or the latest flat screen television. You have to be willing to invest, even if it’s a just $10, in doing something that will feed your soul.
According to the book Happy Money, The Science of Happier Spending by professors Elizabeth Dunn and Michael Norton, knowing how to use your money to maximize your wellbeing goes a long way toward buying happiness.
They identified the following core principles of “happier money”:
Focus on experiences: Building memories, and spending time with family and friends are the foundations for a happier and more fulfilled life. When it comes to happiness, material things just don’t measure up.
Buy time: Time is the one precious commodity that most people wish they had more of. The authors found that purchases that improve the way you use your time help you make life choices that, in turn, generate more happiness. So for example, using an app to shop for your groceries so you simply have to park out front while someone else places the bags in your car is worth the annual grocery store membership. Spend money so you can better manage your time and improve your quality of life, rather than saving money doing tasks you hate.
Give to others: It may seem counterintuitive, but yes, giving to others releases a happiness surge. Regardless of age, demographic, gender or economic level, the research found that investing in others provides more happiness than spending money on yourself.
Make it a treat: Appreciation is another key to getting the best happiness bang for your buck. The same can be said for what you choose to spend your money on after you’ve saved for it.