Friday, December 12, 2014

Money Can't Buy Happiness, or Can It?

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A popular saying in American culture is that money can’t buy happiness. And, while that statement often makes us feel better- especially when we compare our own economic state to that of our richest neighbor or relative- that doesn’t necessarily make it true. Scientists recently set out to determine whether that belief was fact or fiction, and they came up with some pretty interesting results.

More Money = Greater Satisfaction

Researchers at the University of Michigan found that the higher a person’s income level, the more happiness and satisfaction that person reports. These findings were arrived at by using polling data from 2007. Upon close inspection, the data revealed that 100% of people earning more than $500,000 per year reported themselves as being “very happy” and “very satisfied.” On the flip slide, less than half of those earning less than $10,000 per year reported the same.

How Much Is Needed for Happiness?                                   

If these findings are leaving you feeling depressed, don’t worry too much. You don’t have to make a whopping $500,000 per year in order to be happy. According to the research data, you only need to make around $75,000. The researchers found that, at this income level or higher, greater levels of happiness were reported. Those making below that amount, especially those at the poverty level, routinely reported having a lot less happiness and satisfaction.

Spend Smart

While this study might make it seem seem like having money and being able to buy...stuff...is the answer to happiness, that’s not the case. While a lot of people try to “buy happiness” in the form of tangible objects, research finds that, while greater income leads to greater happiness, having more material possessions does not.

So, how can you apply these findings in your life? Well, to start with, spend smart. You can’t have money if you spend it all the second you earn it. Start saving and investing now and stop spending as much. Also, in an interesting twist of events, the study also finds that giving money away to others, often in the form of charitable contributions, can also increase happiness. Plus, that type of spending is typically tax deductible, so it benefits the giver in the long run.

Remember, it’s not just having money that equals happiness. It’s having money and using it wisely.

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