How to buy happiness (yes, really)

Have you always believed the old cliche that money can’t buy happiness? Well, new research shows that it can, but only if you use it to buy back time and connection to others.

By Alex Brooks

If you’ve ever felt like you’re endlessly hustling on the grind to pursue more money or bigger retirement savings, then you are.

Yes, there is a positive correlation between income and happiness, but most of us over-estimate it.

As economist Ben Le Fort says, happiness is best experienced frequently rather than intensely. That means taking 4 two-star holidays a year will make you happier than splurging on one five-star holiday.

The study of human happiness and ‘positive psychology’ reveals that once basic needs are met, earning more money does not make you happier. 

Luxury car owners are not happier than people who drive a Corolla, according to this study.

Dr Säde Stenlund, who helped create new research funded by TED and published in Communications Psychology, found “spending on gifts and time-saving services, such as paying for house cleaning or take-away food, led to a greater boost in happiness for those in wealthier nations.”  

People with lower incomes reported more happiness from paying off debt or improving their housing – so when money can relieve basic stress, it does buy happiness. 

The upshot is that money can buy happiness, but each new dollar you make has a smaller and smaller impact on that wellbeing and contentment.

In our early years, we traded time to build financial security – we saved to buy a bigger house, earn a higher salary, or upgrade the car. 

But after 50, this all indicates that you’ll generally be happier using money to buy back time, freedom or connection to others.

So read on if you want to know how to buy your way to a better life (without it costing a fortune).

Time: the zero sum game worth throwing money at

We all have the same 24 hours in a day, 7 days in a week and 12 months in a year. 

If you are awake for 16 hours a day, how many of those hours you feel happy and how many you feel unhappy determines your wellbeing.  

I know that sounds ‘duh brain obvious’ but our usual approach is to ‘save up’ or ‘delay gratification’ – which is fruitless if you already have the basics in place like superannuation and your own home.  

We all need to find the sweet spot where you spend money on what makes you happy while ensuring you have enough financial resources to secure your future.

More on this: 4 ways to spend your dwindling cash that will boost your wellbeing

If you or a loved one experienced a health crisis, how would you change the way you use time?

If you’re working in a high stress job or business, can you take every second Friday off to decompress and recharge?

Think about enriching your time, not your bank balance, and you’ll likely make tweaks that help you take a giant leap towards happiness.

6 proven happiness boosters

Academics and researchers have found several ‘proven’ ways to be happier that don’t involve money:

1. Take a power trip: spend time in nature, walk with bare feet on the grass, or make like the Japanese and do some forest bathing.
2. Give more than you receive: volunteer for a cause that’s close to your heart and let’s you spend time living your passion. Check out the Seek Volunteer website for opportunities near you.

More on this: The secret to a happier, healthier life after 50? Go volunteer!

3. Give your body a joyride: exercise more (even if you think you don’t enjoy it). Whether it’s strength training, Nordic walking, Pilates or a fun workout, exercise makes your brain feel happier.
4. Practice gratitude: noticing what gives you a fleeting feeling of contentment is a proven way to rewire your brain. Whether you write it down in a notebook or practice finding 3 things every day that you’re grateful for, it works.
5. Clean up your most-hated chores: Pay someone to do your taxes, clean your house, mow the lawn or buy meal kits that take the hassle out of your mental ‘what-will-I-make-for-dinner’ load will make you happier. (Paying for a cleaner also means you might fight less with your partner – a double win!)
6. Make time to connect with family and friends: spending time with people you love is guaranteed to make you happier than spending time with people you don’t. Human happiness comes from the frequency of feeling fleetingly content, not the intensity.

Collective happiness with friends and family: another secret

Close relationships to people we love are like a shield of armour to protect us from life’s discontent.

Community, friendship and love are better predictors of a long and happy life than social class, intelligence and even genetics, according to Harvard’s adult development study.

Even more controversially, an American researcher has found that raising the incomes of lower earners could improve overall happiness for a country. Even giving to people you don’t know can boost wellbeing.

So don’t waste time buying a bigger house, a fancier holiday or luxury car. Find your own windows towards contentment that are precious to you and spend your money on that.

People who say money can’t buy happiness don’t know where to shop. 

^{Feature image: iStock/Javi Sanz}

This article contains general information only. It is not financial advice and is not intended to influence readers’ decisions about any financial products or investments. Readers’ personal circumstances have not been taken into account and they should always seek their own professional financial and taxation advice that takes into account their financial circumstances, objectives and needs.

Tell us in the comments: Where do you ‘shop’ for happiness?

More ways your money can boost wellbeing:

• Take steps to reduce your money anxiety
• The economics of happiness
• Use your health insurance extras to support a ‘year of feeling better’