Wouldn’t you like to be rich? Filthy rich. With enough money to just go to the car dealer and buy a Tesla, cash. Or buy a nice apartment in the city centre of some major city? Or go on a year-long vacation around the world? First class of course. Or even better, in your own jet.
Money can buy you happiness!
Wait, can money buy you happiness?
”I love money. I love everything about it. I bought some pretty good stuff. Got me a $300 pair of socks. Got a fur sink. An electric dog polisher. A gasoline powered turtleneck sweater. And, of course, I bought some dumb stuff, too.”
– Steve Martin
Indeed, we need money to cope with everyday life. We need to be able to have a roof over head, a bed to sleep in, food on the table, clothes for the kids and so on. At this level, money does buy you happiness. For someone who couldn’t afford a place to live, having enough money to rent an apartment is likely to increase their happiness. You’re living a decent life, but there is no excess of money and you have to carefully consider where you spend it.
At the next level, you have a bit more money giving you the opportunity to go on vacation, perhaps abroad. You can buy new furniture for your living room, build a veranda or get a better car. Ok, maybe not all of it during the same year, but at least you don’t need to count the money every month to make it last. You already have everything you need and then some. Getting even more money will give you more opportunities to buy things that you want. But will that make you happier?
There is a correlation between money and happiness. But at some level this correlation ceases to exist. When all basic needs are fulfilled and you have some extra money on top of that, you really don’t need more. So how come most of us think that we do? Buying lottery tickets every Saturday in a futile attempt to become rich.
We always compete and compare with other people. We have a constant urge to show that we indeed are successful. And our way of showing it is usually through things. We buy new decorations for our home. We renovate every room according to the latest fashion. We buy new clothes all the time.
There’s no end to this spending frenzy. Not even when we’re out of money, cause you can always get a quick loan that enables you to buy that dress that you really need. Telling yourself that of all the other dresses in your wardrobe, there is not one quite like this one. You really need this one dress. After a while there’s another one that you really need. It never ends, does it?
As you buy more and more things, you also have to spend more time caring for them. This leaves you with very little time to do anything else.
So what if you want to take a step back? To get away from all this spending frenzy?
During the last three years, I personally had to face the battle of making ends meet, living on one low-income salary with three kids in the household. This forced me to carefully consider what I spent my money on. It also made me more creative and appreciative of all the things that I have in life.
Here are some tips that have helped me to spend my money more wisely. Maybe they can help you too.
Write a list
A way to avoid those impulse purchases is to never buy anything the minute you see it. Instead, make a list where you write down what you need to buy. The next time you see something on sale, check your list to see if it’s on there. If not, don’t buy it.
Revise your list from time to time. You’ll be amazed as of how many times you can cross something off the list that is no longer important to buy. Simply sitting on it for a while can bring a different perspective of what you need.
Convert cost to hours
One way to look at your spending is to convert everything you buy into time. For any item that you want to buy, calculate how many hours you have to work to be able to afford it. It doesn’t matter if you have a regular salary or a company of your own. Convert every cost into time units.
Time is your most valuable asset. Don’t spend it too lightly. You can never make up for wasted time.
When you consider your purchases from this angle, perhaps working a full month to buy that new sofa isn’t really worth it? Perhaps the old one will work just fine for a while longer even though it might not be this season’s colour?
Investing in things that will actually create more time for you to do other things gives a different equation. Buying a vacuum robot for your house or a lawn mower robot for your garden means that you’ll get more hours to do other things.
Or buy these services from someone else. That doesn’t only give you more hours, but it also enables someone else to earn money.
Use the happiness index
Consider if your purchase will bring you happiness for a longer period of time. Try to be honest with yourself. For most things that we buy, the sensation and thrill of buying something new wears off rather quickly, doesn’t it? After a month or two that new sofa isn’t new anymore.
Purchasing experiences adds value to your life much more than buying things will ever do. Then again, experiences don’t have to cost much at all. A day hiking in the forest is for free. And no, you don’t need the latest fancy outdoor jacket. An old one will suffice. The birds won’t care.
”Too many people spend money they earned..to buy things they don’t want..to impress people that they don’t like.”
– Will Rogers
Spend your money on things that YOU want to spend them on. Don’t compare to others. Don’t buy something simply because you can or because it’s on sale. Turn off your spending autopilot and make conscious decisions instead.
Become aware of what you truly need, instead of what others might perceive of you. Happiness is the appreciation that you have enough and being grateful for what you have. In doing so, money can indeed buy you happiness.