How money can make you happy or miserable

How money can make you happy or miserable?

Happiness is probably the bottom line for every action human beings take. Why would we do what we do if not to achieve happiness?

What is the best way to achieve happiness is a question that experts have wrestled with all throughout history.

Sigmund Freud, the father of Psychoanalysis was asked many years ago what a person should do to attain happiness. Everyone expected a very complicated answer based on Freud’s complex, sometimes crooked privileged mind. Yet, his answer was rather simple: “Lieven und arbeiten” which translated to English means “to love and to work”.

What did he mean by this?

I suspect that he meant that people in order to be happy, must find a balance between love and work, to love what you do but not allow it to screw up how you live.

This is very simple advice but in reality very difficult to put into practice. People living in a competitive world, constantly changing conditions, and financial challenges, often need to sacrifice the pleasure of living so as to move ahead or make lots of money to maintain a family and be able to pay bills.

How do you achieve the right balance when you have to sometimes work 12 or 14 hours a day in order to make ends meet? How do you achieve balance when you have to meet deadline after deadline?

Some new research, recently unveiled, is beginning to shed some light on the formula to live a happier live.

Conventional wisdom perceives that money can’t buy happiness but it seems science disagrees. According to some researchers, if you work hard and earn lots of money, you can buy happiness.

I suspect some of you, my dear readers, are now feeling the urge to disagree with me. Hold on; let’s analyze what these researchers say.

A bunch of psychologists led by distinguished professor Liz Dunn from the University of British Columbia and Mike Norton from none other than Harvard have recently published a study that indicate the way people use or spend their money might be more important than how much money they earn or produce.

In fact, the National Academy of Sciences tells us that people’s emotional well being increases together with income only up to $75,000 more or less. Once a person’s basic needs are met, including the possibility to pay bills and be able to afford decent shelter and food, making more money will not necessarily make you a happier person. Happiness fades or lessens after $75,000 because most people don’t know how to use the money to buy happiness.

Isn’t this interesting?

A good question is: How does the mind experience happiness?

Studies show that human beings adapt more slowly to experiences than to material acquisitions. As opposed to material possessions, experiences exist as mental illustrations.

Unless you bought a painting during the life changing trip to Brazil, the experience exists only in your mind now. Experiences like going on a day trip, on a holiday, going to the movies, theater, circus or museum require changes to a daily routine. The more changes that are made, the longer it will take to adapt to these changes. During this simple process, the mind forms or creates memories. As time passes, these memories accumulate and they can be retrieved or revisited.
Experiences are most of the time open to positive recall or reinterpretation and slowly have a disposition to become the core of your identity. In other words, a person’s life is quite simple, the sum of his or her life experiences. Simply put, the more abundant recollections of happy memories the happier the person is.

So, what good advice may I share with you in this article?

Contrary to what I usually write about, especially after having written a book about delayed gratification, there are some ways to buy happiness.

1. Try to invest or buy experiences, not things.
Yes, you need to buy things of course, but if you concentrate on using money to travel to an interesting country or taking a wonderful cruise, your mind will start accumulating happy memories. Planning your trip carefully to increase the number of new and exciting activities that you will participate in, will help you form more memories that will help your mind reinterpret, revisit, and amplify or elaborate these memories, setting a solid foundation for long lasting satisfaction. Purchasing material goods quite often has a negative effect on happiness. Buying shoes, cars, clothes, apartments do result in short term comfort but not on long term pleasure. Purchasing comfort is a way lots of people attempt to eliminate the hurt in their lives but comfort is something human beings get used to rather quickly and it must be practiced over and over again in order to retain that feeling. It’s like a drug addict, a high is experienced, and then fades and you need to do it again and again to recapture that high.
2. Money that you are able to spend on friends and loved ones or with friends and loved ones is money well spent. Life is all about relationships. If you had to live alone, life would not be enjoyable or even livable. Think about it. The happiest moments in your life, were spent with people you like or love.
Some time ago, a study looked at how happy people employed on financial institutions were, six to eight weeks after receiving a substantial bonus. It was found that the manner in which they spent their bonus was a better predictor of happiness than how much money they had received. The ones that spent the money on experiences or social activities were happier than the ones that bought something for themselves.
3. Use logic and emotion before you acquire anything.
Logic is very important, no doubt. Balancing your budget or making sure you don’t over spend is also critical. But don’t forget to be emotional about what you are getting with each buy. An effective way to do this is to divide the must buy from the nice to buy and ask yourself what need each acquisition is satisfying. Let me give you a personal example. Many years ago, in a jewelry store going out of business in old San Juan, I bought a Patek Philippe. It was a horrible decision because what I needed from the watch, to tell time, could have been accomplished with a Timex, a much cheaper watch. In fact, we are talking $5,000 versus $50.00. It took me years to pay my credit card and I don’t have a happy memory from that purchase. Yes, short term, my ego was satisfied but long term, my memory is one of being an idiot for having spent that money. If, that purchase had been combined with some sort of wonderful experience, I might feel different but it wasn’t. Besides, in order to achieve happiness, it is better and more efficient to buy a bunch of smaller pleasures rather than spend a large sum of money in one single purchase. Well, at least I learned a lesson that I have never forgotten and that I will not repeat.
You have already within you, all you need to be able to craft a happy life full of growth and creativity and to be resilient in tough times.
Make it easier on yourself by focusing on people and experiences instead of material possessions or extravagant purchases. Use money intelligently not foolishly.