First Person: Money Buys Happiness When I Spend it Right

Yahoo Contributor Network

As my net worth has increased over the years, I have not always been happier. However, I find I'm happier when I allocate my money for certain purposes rather than simply going out and purchasing a lot of meaningless stuff. New research conducted by economists from the University of Pennsylvania and the University of Michigan shows money does buy happiness. According to a recent article by Forbes, people in richer countries are happier than those in poorer countries. Moreover, the richer people are happier than the poorer people living in the same country.

Hitting that happiness plateau

Researchers have said in the past that people reach a so-called happiness plateau at about $75,000 a year. However, the new research shows that as a person's income increases, they continue to climb the "satisfaction ladder." I would speculate that happiness increases because the more money a person has the more choices he or she has. Money obviously brings financial freedom.

Spending money on experiences

I have found in my own life that I'm happier when I spend money on travel or experiences with family and friends rather than material things. At the same time, I'm happier when I feel secure. As long as I can pay off my credit card balance after buying plane tickets or booking a hotel, I am perfectly happy.

Achieving a sense of security

I feel happier the closer I get to paying off my mortgage. Being free of a mortgage gives me a sense of security. However, I don't think I would be happier purchasing a bigger and better home. Most of the people I know who chase after the next best thing don't seem happy. Having more money gives me the freedom to pay off my debts including my mortgage.

Being free to help others

When I use my money to help other people, it also makes me happier. I think having a lot of money in the bank would give me an empty feeling if I didn't choose to use it for positive things in this world. A lot of people say money doesn't matter until they don't have enough money to help their loved ones.

Working too hard for the money

Although having money can increase a person's happiness, there is often a cost involved. I don't want to become in workaholic in order to have more money. My strategy has been to invest as wisely as I can in stocks and exchange traded funds that pay dividends so I will have passive income as I grow older. Although a lot of us talk about working until we are 80, our attitudes may change in another 40 years.

While I still have far to go before having millions of dollars in retirement, I do feel happier as my life becomes more financial secure. I like knowing I'll be able to leave my children a few gold coins they can throw into a wishing well for a happier life.

*Note: This was written by a Yahoo! contributor. Do you have a personal finance story that you'd like to share? Sign up with the Yahoo! Contributor Network to start publishing your own finance articles.

More from this contributor:

Lessons from my First Flip

We were wasting $600 a month

Fighting Fair over Money

Rates

View Comments