If I had a million dollars, I would travel to see the Northern Lights, New Zealand, New Delhi, and backpack across Europe. I’d pay off my student loans and would probably head back to school to get a PhD in astrophysics. I’d buy my parents a house with 50 acres of farmland. I’d start a school for children in the projects. I’d invest in real estate, tech startups, and I’d give some to charity.
Whenever you ask someone what they would do with a million dollars, they usually don’t say, “I’d be happy.” So why is there such a strong correlation between money and happiness?
All of us know that money in itself won’t make you happy, but it does give you the freedom to choose. Freedom – having the ability to choose between public or private school, a Toyota Camry or Maserati, a trip to Disney World or across the globe – is not cheap. You get the point.
Money doesn’t equate to happiness but it does afford all of us the opportunity to do the things we love without a second thought. Gretchen Rubin, author of The Happiness Project says, “No, money cannot buy you happiness, but money can buy you a lot of things that will contribute mightily to happiness.”
Given the fact that most of us are not millionaires, choosing how you put your money to good use is the most obvious and empowering thing you can do. Here are just a few suggestions to get you started:
Spend on Your Close Circle of Loved Ones
It’s not only about what you buy, it’s also about who you are buying for. Even if you’ve been saving up for a new motorcycle, you can still save a little here and there for the ones dearest to you (not to mention, this has proven health benefits for you). If you’ve been saving a little each paycheck, then tally up those funds and reward your wife, parents, or business partner. Using some of your extra cash on someone else close to you gives you an extra energy boost and also adds to your health. Their reaction to these small gifts will remind you why you’ve been working hard all along. You can also invest in co-experiencing gifts, like gym memberships. According to research published in Health Psychology, the more money spent on other people, the lower the blood pressure of the subjects two years down the road.
Make Saving a Fun, Rewarding Experience
With apps like Clink, saving money is becoming an easier, more automated and fun experience. Knowing that your savings will allow you to take that dream trip to Costa Rica is an extra incentive. Check your monthly allocated savings and reward yourself with small purchases along the way.
Buy Experiences, not Things
If you have an extra $250 set aside, look for adventurous opportunities to put it to good use. If you’ve been dreaming of a new gadget, research suggests that spending the same amount of money on an experience leads to greater happiness than spending that amount on a material thing. Sharing an experience with your friends and family actually adds to your serotonin levels and makes the memory of the event last longer than the experience of a material purchase.