Saturday, March 8, 2008

Who Says Money Doesn't Buy Happiness?

People say money doesn't buy happiness, and I don't fully agree. It buys options, and if you know how to choose your options, you can definitely achieve happiness.

Personally, money can (and does) buy me happiness. When I, for instance, save for trip and I reach my financial goal: that makes me happy. What makes me ecstatic is actually going on the trip. When I finally reached my financial goal for going on my mini-retirement, I was astounded. I had accumulated enough money to make a personal dream a reality. There isn’t a price you can put on this.

So yes, having the money [to do what I like] makes me happy. If I wasn’t able to travel, I would be a less happy person. Money allows me to buy things or experiences I enjoy, which in turn makes me happy. Ergo, money buys me happiness. If I couldn’t participate in the things that I’m passionate about, I would be unhappy.

Of course, if someone is simply depressed in general, or is unhappy for another reason, spending money is not going to fix those feelings and make them happy for more than a few minutes. This kind of spending behavior is how a lot of people get into serious debt.

I always try to live my life in a way that doesn’t leave room for regrets. I don’t follow the belief that everything that someone wants to do should be saved until retirement. I’ve met many people who want to travel when they retire, yet couldn’t imagine taking a month to travel now. For a variety of reasons, this appalls me. Personally, I would rather have debt than regrets. If I have to work a couple years extra before retiring [for good], because of the mini-retirement year I took, that’s a price I’m willing to pay.

Like so many other things with money management, how we use money is about making choices. When someone has control of their finances and is able to do the things important to them, my bet is that that person is happier than someone without the resources to do what is important to them. Obviously, the personal price of happiness varies widely from one person to the next. Yet, that price exists. For some people, it’s simply being debt- free. For others, it’s having $1 million for retirement. For others, it’s having enough money to work at a job they love, but that doesn’t provide a livable income. Or maybe someone wants to give a significant amount to charity. Or maybe someone wants to be able to provide a private education for their child.

In addition to money being able to buy happiness, it can also buy freedom. I’ll never forget the true sense of freedom I had when I travelled for nine months. Yes, I had some debt, but I simply put money in a special checking account, set-up automatic payments, and forgot about them. For those nine months, I was free. I reported to no one but myself. I did nothing I didn’t want to do. If I was in Italy and wanted to spend the day lounging in my hotel room and watching French films dubbed in Italian, I could. If I wanted to make a two-week detour somewhere, there wasn’t anything stopping me. It’s a remarkably freeing thing to not depend on someone else for money, and to be able to do exactly what you want to do, and have enough money to do it (within certain limitations of course – I wasn’t staying at 5-star hotels…). I was able to follow whims, leave town on a moment’s notice, do things I hadn’t originally planned.

I don’t think anyone should feel guilty about money, especially when it’s used to buy things or experiences which are important to them. Obviously, we need to live within our means and not rack up a lot of debt “just making [myself] happy.” As long as spending money isn’t being used as a stopgap for personal or psychological issues, money definitely can buy happiness.

Buying happiness doesn’t mean that the money is used to buy actual products – it can be used to buy intangible items, or simply to “buy” peace of mind by having an emergency or retirement fund that will protect against sudden unemployment or high medical expenses. It’s about conscious spending.

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