Photo: Jaime Hogge Image credit here
On the Money
DAVID TRAHAIR Can Money Bring You Happiness? L
ET’S START WITH THE OBVIOUS. Does making more money bring more happiness? The answer is that it depends. Think about low-income
earners who can’t afford to buy food or pay the rent. Certainly, for them, making more money so they could afford to support their family would make them feel a lot better about life. But what about people who have all the basics covered? Think
about the last time you got a raise. It probably made you feel good when you heard you were getting it, but a few months later, did it result in you feeling better about your life in general? For many people, earning more money provides little lasting improvement in how they feel about their lives. According to a study done by Princeton University’s Woodrow
Wilson School several years ago, happiness increases as someone earns up to $75,000 a year. But no matter how much more than $75,000 they make, they don’t report experiencing much, if any, more happiness. So if focusing on earning more money is not going to increase
our happiness, how about we instead focus on what we can all control, which is how we spend the money we do have. I’ve just finished reading a fascinating book on the subject
titled Happy Money: The Science of Happier Spending, by Elizabeth Dunn and Michael Norton. They conducted extensive research including experiments where they gave people money and told them how to spend it. Here are some of their key findings. Invest in experiences rather than stuff Many people assume that buying more things for themselves will bring them happi- ness. What the authors found was that in many cases this was not just unproductive for happiness, but counterproductive. Shiſting from buying stuff to investing in experiences is one of the most important recommendations. Their research showed that people tend to be initially happy with new things, until they realize that better things are available. They also found that sat- isfaction with experiential purchases (vacations, going to restau- rants, spending time with friends and family, hobbies, etc.) tends to increase with the passage of time, while satisfaction with material purchases tends to decrease. Spend time and money on others Many people they studied reported feeling significantly better aſter donating their time or money to those less fortunate. And it doesn’t even have to be a large amount. In a Gallup World Poll of 136 countries, donating to charity was found to have a positive effect similar to what people thought doubling their household income would have. Exercise When was the last time you were depressed while you
were exercising? Exercise results in immediate and longer-term benefits for happiness. The authors found that the more you exercise, the happier you get (within a reasonable range of exertion). Stay focused Have you given any thought to exploring the concept of mindfulness? Staying focused on the present moment is beneficial for happiness. In fact, people are happiest when they remain focused on an activity, whether that activity is pleasant or unpleasant. Socialize more The authors provide evidence that people experi- ence the most positive moods of the day while spending time with friends and family. Also, playing with children produced more positive feelings than almost any other common daily activity.
One of the best financial moves you can make can also make you happier
Focus on time, not money This is a tough one for accountants; aſter all, time is money, right? But working long hours to earn more money to provide your children with fancier homes and shinier toys represents a bad happiness trade-off, especially given that it reduces the time you’ll have to be involved in their lives.
Imagine you are on your deathbed Do you think you’ll be wishing you bought more stuff? Probably not. My bet is that you’d give just about anything for more time. The authors encourage us to think about how each purchase we make will change the way we use our time. When people focus on their time rather than their money they begin to act like scientists of happiness, choosing activities that promote their well-being, rather than activities that will bring them more money. One last tip: decreasing debt has been shown to provide one
of the best routes to increased happiness. Brilliant — one of the best financial moves you can make can also make you happier.
DAVID TRAHAIR, CPA, CA, is a personal finance author and speaker (
www.trahair.com). His latest book for CPA Canada is The Procrastinator’s Guide to Retirement
MARCH 2017 | CPA MAGAZINE | 53
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72