Money & Happiness

Happiness is often a clichéd topic to write about. But the pursuit of happiness seems to drive so much of our behavior in life, our work life, our family life, and our financial life, that it is impossible to ignore. The irony is that most people spend the majority of their waking hours working a job to make sure they and their family can get the life they desire, and ultimately, be happy. But most people spend very little time thinking about what really creates long-term happiness, and more importantly what creates joy. How can we best spend our time, our money and our resources to ensure that we’re living a life of fulfillment? 

A lot of research has been done on this issue, and I’m going to cite two studies in this article. The first study is by Elizabeth W. Dunn, Daniel T. Gilbert and Timothy D. Wilson entitled, "If Money Doesn’t Make You Happy then you Probably Aren’t Spending it Right," published in April 2011 and the second study is the Harvard Grant Study, which tracked 268 male graduates from Harvard University between 1938 and 1940. This study has followed their life story over the last 75 years, and ultimately their happiness. Most people in this study are now well into their 90s. So, ultimately what makes us happy and what can we do about it? Here are three key takeaways from these studies outlined below. 

1. Buy experiences instead of things.

The Dunn, Gilbert and Wilson study found that significantly more happiness was created by money spent on an experience, rather than money spent on stuff. The study says, "home buyers find their once beloved Brazilian cherry floors quickly become nothing more than the unnoticed ground beneath their feet." Stuff eventually becomes stuff, and the car that we once fantasized over eventually becomes the vehicle that just gets us where we need to go in life. We often even forget the happiness we thought it would bring. On the other hand, experiences with family and friends enrich our life and give us memories that create lasting happiness. 

2. Help others instead of yourself.

Also in Dunn, Gilbert and Wilsons’s study, they found that people who gave their time and their money financially to causes beyond themselves reported much greater happiness than those that lived a life focused on themselves. Ultimately, the irony of money is that sometimes it makes us the happiest when we give it away. 

3. The only thing that matters in life is relationships.

In the Harvard Grant Study from the 1940s, what they found beyond all things money, power, recognition, was when the recipients looked back on their life, what ultimately mattered was the relationship with their family members and their relationship with their friends. It led to not only greater happiness, but also longevity. 

Hopefully these bullet points, while succinct and broad in nature, will give you something to think about as it relates to what makes you happy, and how you’re spending your money or your time will ultimately lead to a fulfilling life.

Article prepared by Wealth Management Advisor Ben Beshear with the cooperation of Northwestern Mutual. Beshear is an insurance agent of Northwestern Mutual based in Cincinnati. Email Ben at ben.beshear@nm.com. Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company (NM), Milwaukee, Wisconsin, and its subsidiaries.