Monday, May 23, 2016

Four Ways To Use Money To Gain Happiness

Here's the lesson: Use your worldly resources to benefit others and make friends. Then, when your earthly possessions are gone, they will welcome you to an eternal home. 
- Jesus (Luke 16:9, New Living Bible)

Researchers are finding that money can actually make us happier and add joy to our lives. But it doesn’t matter so much how much of it you have, but how you use it. 

Here are four ways you can manage money to add to your sense of wellbeing:

1. Resist spending money on newer or nicer material possessions. Cornell University psychology professor Thomas Gilovich suggests that buying more things doesn’t really add to our enjoyment of life because we quickly adapt to them, the luster wears off, and the new additions to our wardrobe or to our three-car garage simply become a part of a new norm we soon take for granted. (Sadly, this mindset also negatively affects our offspring, who grow up expecting an unsustainable standard of living they consider their right).  

“Human beings are remarkably good at getting used to changes in their lives, especially positive changes,” says Sonja Lyubomirsky, psychology professor at the University of California, Riverside. “If you have a rise in income, it gives you a boost, but then your aspirations rise too. Maybe you buy a bigger home in a new neighborhood, and so your neighbors are richer, and you start wanting even more. You’ve stepped on the hedonic treadmill. Trying to prevent that or slow it down is really a challenge.”

2. If you do spend money on yourself, get far more bang for your buck by investing in new experiences rather than in new possessions. Ryan Howell, associate professor of psychology at San Francisco State University, found that people think material purchases offer better value for the money because they are tangible and last longer. But he points out that a lot of the satisfaction people gain from new experiences is in anticipating them ahead of time, and also found that when people recall and relive them, they also find that such experiences are a gift that truly keeps on giving. Think traveling or serving abroad, or visiting a long time friend or relative, or hiking the Appalachian Trail.

3. Invest in generous giving of the kind that adds to others’ happiness. Multiple studies show that we gain the greatest satisfaction of all by spending our wealth to better the lives of people in need. Elizabeth Dunn, associate professor of psychology at the University of British Columbia and co-author of the book “Happy Money,” says that while earning more may tend to enhance our well-being, we become happier by giving it away than by spending it on ourselves. 

In one experiment she handed out cash to college students on campus and told some to spend it on themselves and others to spend it on someone else. Those who spent money on others reported being far happier than those who spent it on themselves. 

She also analyzed data from 100 countries and found that people who donated money to charity were happier whether they lived in poor or rich countries. As people see their money making a difference in other’s lives, it gives them great joy even if the amount they have to offer is small.

4. Put your savings to work by doing “impact investing” through organizations like the Calvert Fund and similar organizations.  This way your retirement money can be supporting causes that are truly in line with your values, like providing money for small farmers and entrepreneurs around the globe, or in funding start-up solar or other projects you feel deeply about, for example. Imagine being able to help alleviate poverty, improve the lives of people and help make the earth a better planet while still having some money available for retirement if you need it. 

The interest isn’t great, but the principal is remarkably safe, and the investment honors principles you feel deeply about.

And living by time-honored and Jesus-inspired principles should make us all very happy indeed.

Here's a link to some of my sources for this piece:

See also:
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