CAN MONEY BUY happiness? We’re often told that it can’t, but as Bo Derek said, ‘Whoever said money can’t buy happiness simply didn’t know where to go shopping’.
While that’s a bit flippant, there is an element of truth to it – there has been a lot of research around money and happiness and it’s been found that it’s not how much money you have necessarily, but how you spend it that counts. And even more than that, how you save it.
According to a survey by a US bank, there is a strong link between saving money and happiness. The survey found that of people who had a savings account, 38% felt extremely or very happy. Only 29% of those without a savings account felt that way.
According to the survey, 84% of people felt that having savings boosted their sense of well-being and life satisfaction more than eating healthily, work satisfaction or regular exercise.
Here are the reasons why people said having savings made them happier:
So, should you save every penny you earn in order to be happy? Absolutely not. It’s all about…
Research has also been conducted around spending money and happiness. According to Elizabeth Dunn, who wrote a study (with Lara Aknin and Michael Norton) called ‘Spending Money on Others Promotes Happiness‘ which she then expanded into a book, ‘Happy Money: The Science of Smarter Spending’ (with Michael Norton), money can buy happiness – just not the way you think.
It’s not just about what you buy, but how you feel when you buy it. So buying a one-off large purchase (such as a car or expensive item of furniture) may not give you as much satisfaction over the course of its life, as buying multiple €3 coffees and spending time with friends over the same period of time.
According to the research there are five core principals of smarter (and better) spending:
Human beings are rewards-oriented animals and tend to live our lives (unless you’re very Zen) striving for the next bright and shiny thing (or pay rise) that will make our lives better. More often than not the things that we strive for are, in fact, objects. So a new house or car rather than a holiday or even a weekend away. But research has shown that buying experiences can make you happier than buying things.
Whether you buy experiences or things may actually depend on your personality and spending in the ‘right for you’ can also increase satisfaction.
Another study by researchers at the University of Cambridge, analysed 77,000 financial transactions of 625 participants, and found that there are five personality traits (the ‘Big Five’) which correlate to people’s spending habits. So, if you’re a highly extroverted personality you’re more likely to spend more on nights out in the pub, while conscientious people are more likely to spend more on health and fitness, and so on.
If all that wasn’t incentive enough to save, how about the fact that a survey of 2,500 people has found that saving even £50 (approx €59) per month has a direct impact on mood and state of mind? No matter how much money you’re on, making an effort to save some of it, and seeing it grow over time, contributes significantly to peace of mind and feelings of stability. And who doesn’t want that?
Everyone knows saving money can be challenging, but there’s persuasive evidence that it can help happiness levels in the long run.
Whatever your current spending habits, the long-term savings at Electric Ireland are always there for you. Electric Ireland are offering loyal customers rewards for staying with them – a yearly saving of 8.5%. Stay happy with Electric Ireland, the energy provider that’s here for you long-term.
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