Money Doesn’t Buy You Happiness…but Financial Security Does

As the old adage tells us, money can’t buy happiness; it sounds nice, but is it actually true? It certainly feels good to buy new things, so it’s not surprising that many people dismiss this old saying as a useless platitude from a bygone era.

The fact of the matter is that, despite how good purchases make us feel in the moment, they do nothing for long-term happiness. People already have too many things, and they often get them for the wrong reasons.

We associate better finances with happiness because there is a causal link between the two. More money means a better standard of living, less risk, and (theoretically) less stress over the necessities of life, like food and shelter.

However, an important point here is the difference between having more money to spend and spending more money. Whenever we put a new 60” plasma screen or pair of shoes on the credit card, our brains are rewarded with a small hit of dopamine, which essentially gives us an intense, albeit short-lived feeling of happiness and well-being.

We have confused the happiness that financial security brings with the fleeting thrill of acquiring new possessions.

The irony is that buying more and more things generally lands people deeper in debt, thus burdening them further and putting their long-term happiness at risk. This leads to another issue that is potentially detrimental to our happiness: too much clutter.

Of course, this is not to say that we are all hoarders, but simply that we have way too many things that we do not need, and not enough space to store them.

Prioritizing financial security over acquiring material possessions is a step in the right direction. So, how can a family set aside money for long-term savings, cut down on clutter, and still have nice things? It may sound like a pipe dream, but with a little prior planning and determination, the lifestyle and happiness that you desire can be attained.

Creating a balanced budget.

It may seem obvious, but many families encounter trouble due to a very clear and fixable problem: they spend more than they bring in. This creates debt, and more often than not, debt only creates more debt, which exacerbates the problem ten-fold.

With a budget that accounts for the essentials, emergency expenditures, savings, and even non-essential spending, this problem can be avoided entirely. A balanced budget also goes hand-in-hand with…

Determining what is ‘essential’ and what is ‘non-essential.’

Again, this may seem like a no-brainer, but it is not as easy as it sounds. You may need a smartphone for work, but do you need a new, top-of-the-line phone that costs more than your rent, or would a modestly priced phone fulfill your needs at a fraction of the cost?

These are the kinds of questions that people have a tough time answering because the desire for newer and better things is hard to resist.

In other words, we confuse WANT with NEED too frequently.

I have heard too many times clients say, “I NEED Cable TV,” or, “I NEED a monthly massage,” etc. If we compiled all of the things we said we needed and looked at the list, I think most of us would feel pretty silly.

In the end, what’s more important: The NEED for cable, massages, etc. or the NEED for financial freedom in the future?

We have to understand that when we justify to ourselves the need for those things, we are literally mortgaging our future. It would be a good exercise to actually sit down and write down a list of what you actually NEED in your life to live/be content. And don’t skimp on the details! It’ll be easier for us to then clarify to ourselves that the other stuff is actually WANTS, and then we can CHOOSE whether we want to extend our financial resources in obtaining that want.

When we convince ourselves those wants are NEEDS, we have a harder time letting go of them, even if it’s costing us financially.

And finally…

Clearing the clutter!

This is perhaps the easiest, albeit the most physically demanding change to make in your life.

Having too many things doesn’t just hurt your wallet; it can have a negative impact on mental well-being, too. Studies have shown that too much clutter can change the way a person views their own home, and by extension, the way they view their entire lives.

If we’re honest, the primary culprit for our accumulation of clutter is the result of buying (or receiving as gifts) novelty items that seem exciting in the moment, but quickly lose their allure and are tossed aside for the next shiny gadget shortly thereafter.

It’s safe to say we should really reconsider this philosophy.

People spend the vast majority of their lives at home, so if the house is filled to the brim with junk or simply things that people are unwilling to throw away, this can create a negative view of the home space.

As the home is such an integral part of life, this, in turn, creates a negative self-image and a distorted view of general satisfaction.

So the obvious solution is to throw everything out, right? Not necessarily.

There are many possessions that are either very important for daily living or personally significant, so there is no need to dump it all in the trash. Reorganizing and rearranging items can do wonders to clear up space and cut down on a lot of stress in the process.