Happiness and well-being are an essential part of health.  Stress from any cause is highly detrimental to health and research has indicated that stress is a factor in up to 85% of all illness. It can cause illness or aggravate existing illness.  Nancy was a middle-aged woman who I met two years ago.  If you looked at her blood test, the results seemed to indicate that she was in good health.  Her weight wasn’t bad and blood pressure was only borderline high.  All in all, things seemed good, but she never felt well and was always getting sick.  It was all stress, and it was all coming from what she perceived as financial problems in her family.

Does money buy happiness?  Well, yes—or no—or maybe-sometimes.  The question that begs to be asked, really, is “do you need money to be happy?”   The answer is really yes, no, and maybe.  It all depends on how we look at the situation.

Over my 19 years as a fitness professional and wellness coach, there barely is a week that goes by where I don’t hear from someone about the stress in his life due to his finances.  Somehow, even though individuals and their spouses are working hard, they never seem to have enough money for what they deem to be essential needs.  This situation causes them very damaging stress.  A survey by the American Psychological Association in 2014 showed an astounding 72% of people saying they had financial pressure or stress during the previous month—yes-72 percent!

How to spend money on happiness

Tom Rath and Jim Harter are both Gallup poll researchers.  They have done considerable research on well-being including financial well-being. Their compilation of research shows some interesting, although sometimes contradictory trends.   First, when looking at the overall public health, they found that people who live in countries with a higher Gross Domestic Product (GDP) per capita have a higher degree of well-being for the population as a whole.  The wealthier your country, the better off you are.  But can an individual buy his well-being?

Rath and Harter quote a study done by a team of Harvard researchers who surveyed people about their spending on themselves and spending on others.  It seems that spending money on oneself does NOT boost happiness or well-being, in contrasts to spending money on others which does boost happiness and well-being. If you have indeed participated in acts of kindness, you understand the internal good feelings you have from helping others.

According to happiness researcher Dr. Sonja Lyubomirsky of the University of California, Riverside, 40% of happiness is within our power to change through actions and thoughts.  Another 50% can be attributed to genes.  Surprisingly, only 10% of our happiness is associated with life circumstances, such as money, health, marriage, appearance, etc.  Dr. Lyubomirsky also states that exercise may well be the most effective booster of instant happiness. If you make fitness a life-long endeavor, it can help you make happiness life-long as well.

Dr. Martin Seligman, the father of Positive Psychology, notes that doing an act of kindness produces the single most reliable momentary increase in well-being. This affirms the Harvard study about spending on others.

Spending and earning

Often when we are feeling sad, we try to use money to cheer ourselves up.  Many people think that going out on a shopping spree will make them feel happier.  Usually such behavior results in feeling worse than before.  One survey actually showed that when you shop in order to feel happier, you may spend much more on any given product that you would have ordinarily.  On the other hand, according to Rath and Harter, when you plan an evening out or a vacation, you have something to look forward to, you enjoy the experience and you have memories that can last for a long time.  This would be one area where money can contribute to your happiness.

All of us seem to try one way or another to earn more money.  After all, it is true that being able to pay monthly bills, school tuition, being able to clothe your family and have a little money left for an occasional fun day or vacation can go a long way towards keeping stress levels down and happiness up.  But a very interesting study from the field of behavioral economics have exposed the irrationality of our financial decision making.  We all are what scientists call “loss averse.”   In other words, it hurts a lot more to lose $50 that we already have than it feels good to win or earn $50.

People who make wealth accumulation a target goal never seem to find a sense of security. Striving for and achieving earnings of more money doesn’t necessarily bring happiness and good feelings to people either.  So what does?  A general sense of financial security—in other words, LESS WORRY!  The perception that you have more than enough money to do what you want, has three times the impact of your actual income on overall well-being.  If you keep things in perspective and understand that you don’t have to be wealthy to be happy-you will be happy with less money. 

Be Practical

If you do want money to contribute to your future happiness, invest to minimize your stress.  Live modestly but always invest in your future.  Minimal investment in your retirement and small saving for major events (a new appliance, your son’s Bar Mitzvah, a gift for your wife) will keep the stress down.  Small contributions each month will build up over time.  Don’t spend what you don’t have!  Yes, sometimes we have no choice but to use credit, such as buying an apartment or home or large appliance, but be sure you can make that monthly payment so you can pay back your loan.

When Nancy came to realizations about money and finances that helped her be less stressed, along with other stress management interventions, her life and health improved greatly.  No more getting sick and her blood pressure slowly fell back into the normal range.

Money will not in and of itself bring you happiness.  However using your money for kindnesses will.  Happiness is an integral part of overall health. So be happy with your portion and use your money for helping others and it will “add hours to your day, days to your year, and years to your life.”