4 Ways to Use Money to Become Happy
This is your brain on (giving) money
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You might know that I am in the process of writing my second book.
The second book is about how to make evidence-based investment decisions. What no one except my wife and my cat knows is that I am already researching my third book (look for it in 2023.)
My first two books focus on the question, how can we use money to become wealthy? The third book seeks to answer a more difficult question, how can we use money to become happy?
After some initial research into the question, here are four ways you can use money to increase happiness.
#1— Providing economic security for your family
Without getting into semantics, this might be more about facilitating happiness than causing happiness.
Throughout most of my 20s, my family was struggling financially, and there was not much I could do about it. I piled on extra debt to help family members pay their bills, but it was a band-aid solution.
While it felt like I was doing the “right thing,” I could never feel truly relaxed or happy because I knew we would be right back in the same situation when rent was due next month.
It wasn’t until I started making enough money to buy family members financial stability that I was able to feel truly accomplished.
To this day, the two financial decisions that I am most proud of are:
Buying a house for my parents to live in.
Maxing out my son’s college fund every year.
#2—Splurging on things that matter to you
It took me a long-time and a lot of saving before I was able to give myself permission to spend money on things I enjoy.
It sounds so obvious that it’s silly. Of course, spending money on things you enjoy is an easy way to live a happier life.
But, when you are faced with difficult financial conditions early in life, financial anxiety becomes deeply rooted in your soul. Studies have shown that people who grew up during the great depression spent their entire lives never wanting to splurge, even on things they really wanted and objectively could afford.
The depression-era mindset is hard to shake.
You don’t have to have grown up in the great depression to have a depression-era mindset. Millions of people around the world are living through their own great depression right now.
In a previous post, I detailed practical steps that you can take to;
A.) Figure out what you value most in life and;
B.) Put a plan in place to finance it.
#3— Find a career that provides a level of autonomy
There’s a time in life to “grind” and focus on work and building wealth, and there’s a time to take your foot off the gas a little and spend less time working and more time living.
In a recent Medium post, I reviewed a research study that confirmed wealthy people are happier than the general population. The researchers pointed to two primary factors that explained wealthy people’s increased happiness.
They spend more time on “active” leisure. (Think going to the gym instead of watching Netflix.)
They have more autonomy at work.
The point of active vs. passive leisure should be exciting to anyone reading this because it provides a clear, actionable step to start becoming a little bit happier starting right now. Replace 30 minutes per day of screen time with time spent outside, and odds are you will be significantly happier 100 days from now.
The second point on autonomy at work is more of a long-term career goal.
Here are a few questions you might want to ask yourself about your current job.
Do you get to spend a lot of your time working on projects you choose?
Do you get to pick who you work with?
Do you have the option to work from home?
Are you satisfied with the amount of PTO you receive?
Do you feel comfortable ignoring working calls and emails in the evening and on weekends?
If you find yourself answering “no” to a number of these questions, you might not have much autonomy in your job. Spending 8-hours of your day having other people decide what, where, when, and how you work is not a recipe for happiness.
#4— Giving money and time to causes that you believe in
Another reason the very wealthy tend to be happier is that they have more money and time to give to charities that are closely aligned with their beliefs.
A 2006 study found that the part of the human brain that controls dopamine levels and another part that helps facilitate social attachment become significantly more active when you give money to charity.
It turns out the old saying “It’s better to give than to receive” actually has a biological basis. Giving money to causes that align with your values makes you feel happier and more connected to others.
Don’t have money to give? Then donate your time to a local charity.
Giving your time is a “two birds with one stone” approach to increasing happiness and fulfillment because it combines the dopamine hit of “doing good” with the benefits of “active leisure”.
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This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.
Very encouraging.