They say money canâ€™t buy happiness, but in a capitalist society, you do need at least some of it to get by. According to an article published in scientific journal Nature Human Behaviour, we should be shooting for a specific number when searching for emotional well-being â€” a surprisingly low figure, starting at about $60,000 and ranging to $95,000 per year, depending on global location.
Research also shows that spending money on experiences rather than material objects leads to more overall satisfaction. More specifically, weâ€™ve learned that spending money on *certain* goods and services is even more strongly linked to well-being than income level.
In personal finance writing, we spend so much time talking about what you shouldnâ€™t spend money on. Instead, here are five purchases that can actually boost your overall happiness.
Although it doesnâ€™t always feel like it, money is a renewable resource: you can always make more of it.
But the same canâ€™t be said for time; we all only have 24 hours in the day.
You can, however, buy yourself more time by paying someone to do routine houseworkâ€¦ and research shows that doing so can, indeed, make you happier.
Harvard Business School researchers surveyed over 6,000 American and European earners on how often they outsourced chores like cooking and cleaning. They found that those who engaged in â€śbuying timeâ€ť in this way experienced a statistically significant increase in happiness.
They also performed an experiment in which they gave participants $40 to spend on either time-saving services or material objects. Those in the former category reported higher levels of satisfaction thereafter.
Even if hiring a full-time housekeeper isnâ€™t in the budget, there are plenty of time-saving services that can be affordable when planned for, such as meal delivery services.
And keep in mind that housekeepers and other home service professionals can usually be hired on a one-time, rather than recurring, basis â€” so if you just need someone to help out during a particularly busy week, it might be a worthy investment.
Imagine you find a spare $50 in your coat pocket â€” a small, but totally unexpected, windfall.
You could spend it on a new pair of shoes or on tickets to a concert. Which choice would make you happier?
As mentioned above, much scientific research suggests that spending money on experiences rather than material possessions leads to higher long-term satisfaction. Although the shiny newness of objects fades, memories can last a lifetime, leading to â€śmore enduring happiness,â€ť said Amit Kumar, an assistant professor at the University of Texas at Austin, in his doctoral research at Cornell University.
However, opting to spend on experiences isnâ€™t a foolproof metric for avoiding buyerâ€™s regret. For one thing, not all experiences are pleasant or memorable (think: dashing out for lunch on a work break or getting an oil change), and in some cases, saving money may still be the better option.
Speaking of savingsâ€¦
Although it might not count as â€śspendingâ€ť money in the traditional sense of the word, funneling money into your savings account is still a way to allocate your funds.
And as it turns out, research shows that many consumers, and millennials in particular, experience more life satisfaction when they engage in â€śproactive financial strategiesâ€ť â€” like saving some of it.
Given that money is one of the main sources of stress for Americans, it makes sense that padding your emergency savings cushion could lead to a greater sense of well-being. In fact, one report found that increasing savings by 10% had a greater impact on life satisfaction than being happily married, which is a pretty impressive statistic.
When we think about spending money, we typically think about ways we might spend it on ourselves. But some studies show that prosocial spending â€” money spent on others â€” can lead to more satisfaction.
According to an article by researchers Elizabeth Dunn, Lara Aknin and Michael Norton, the benefits of prosocial spending have been self-reported by adult survey respondents around the world, and are apparent even in toddlers.
There are many ways to engage in prosocial spending, whether it be in the personal sphere (giving gifts to friends and family) or the community (donating to charity). However, donating money to certain eligible organizations, like nonprofits and religious institutions, has the additional benefit of being tax-deductible.
However, itâ€™s important to carefully vet the places youâ€™re considering supporting to ensure your charitable donations go to the right place. Scams do exist, and accidentally gifting your money to a charlatan is unlikely to increase anybodyâ€™s happinessâ€¦ except, of course, the scammerâ€™s.
Although money canâ€™t buy happiness, it can buy more time in schoolâ€¦ which can lead to increased happiness, even if you arenâ€™t the type who loves the classroom.
For one thing, higher levels of education are correlated with better-paying jobs â€” which, as established above, is one ingredient in the recipe for life satisfaction.
But other research suggests that education in and of itself increases happiness, with one survey suggesting that graduates are better able to cope with challenging life events like divorce, illness and unemployment.
Itâ€™s important, however, to add the caveat that the same study found that the effect has diminishing returns: each successive level of schooling (undergraduate, postgraduate, doctorate, etc) added â€śa little less to the well-being score.â€ť And if you canâ€™t afford to go back to school out of pocket, or without taking out substantial debt, the weight of student loans might easily supercede any positive effects of the decision.