- A lack of money can sure deliver a lot of unhappiness
- If you're in the top 5% or so of households by income and
you're not happythat money is not increasing your happiness, chances are you're doing something wrong.*
But most people could take that money and make themselves happy. And yet, clearly a lot of people can't figure out how to use their money to buy happiness, or else that old saying wouldn't be an old saying.
Now, I'm not saying that the only path to happiness is money. There are plenty things in my life that make me happy and cost no money whatsoever- going to the beach, playing with my kids, and reading a good book come to mind.
I also use money to buy happiness in the conventional sense: I buy things and experiences that make me happy. Travel, good chocolate (OK, just about any chocolate), and cute yet comfortable shoes come to mind.
But I think the secret to buying happiness isn't to buy things or experiences. It is to buy freedom. Things and experiences bring happiness that is often fleeting, and skates across the surface of our lives, making it easily disrupted by the daily stresses of life. But the happiness that freedom brings goes deep, and it lasts.
I realized that I buy happiness by buying freedom as I thought about the work-life scenarios Laura Vanderkam invented for a recent post. This post was itself triggered by my earlier statement that I use money to buy myself out of a lot of work-life balance problems. That is definitely true. I solve the problem of not wanting to spend much of my free time cleaning by paying a housecleaning service. I solve the problem of not wanting to spend my evenings or weekends shopping by buying a lot of things online, even if that is more expensive. Frankly, I don't know if it is more expensive or not, because I don't comparison shop. I don't need to, and I don't enjoy it, so why bother? In short, I buy a lot of time, and that contributes to both my work-life balance and my happiness.
But as I thought about Laura's post, I realized that the biggest way I use money to make my work-life balance better and to make myself happy is to use it to buy freedom, namely freedom from my job. Don't get me wrong- I'm not independently wealthy. If I quit working altogether, we'd drop several rungs down the income ladder. But I do not feel like I have to keep this particular job, because my husband and I have a hefty buffer in our bank account.
We initially set it up as self-preservation, after I realized just what it meant to work in a volatile industry like biotechnology. But that self-preserving move has had an unexpected pay off. I don't feel trapped in my job (and my husband doesn't feel trapped in his). I know that if I get fed up and quit, we have enough money in the bank to keep us solvent while I figure out what to do next. That is an incredibly liberating thing. Little obnoxious policies at work don't bug me so much, because I know that I don't actually have to put up with them if I don't want to. I feel free to speak my mind without worrying too much about the consequences, because the worst that could happen- they fire me- doesn't scare me. I don't worry about setting my schedule to fit my needs or pushing back (politely, of course) on that annoying director who keeps trying to schedule meetings that run until after I usually leave to pick up the kids from day care. In short, keeping a fair amount of money tied up in this buffer buys me happiness because it buys me freedom from a lot of unnecessary stress.
Obviously, our buffer is not infinite. At some point, it would run out. But my husband and I thought about the level of risk we're comfortable taking, how much we would be willing to trim our lifestyle if necessary, and how quickly we think either one of us could find a new job or start something up independently and have it make a reasonable income. From that, we settled on the size of our buffer. We have sized our buffer and set our lifestyle such that we could continue to live a minimally changed lifestyle for a year with only one of us working. Different families will need different buffers, but I suspect that just about everyone would find having one liberating.
The great thing is, you don't need to be in the top X% of incomes to achieve this, although obviously, a higher income makes it easier to achieve, as long as you don't go nuts and insist on buying a new Mercedes every three years. I know other people who have achieved the same feeling of freedom via a buffer, but who make far less money than my husband and I do. For that matter, we first set up that buffer when we made almost $100,000 less per year than we do now. We've kept it through a destination wedding and a four month trip around Asia and the Pacific. We've kept it through maternity/paternity leaves and, most recently, a period during which I was not working. Obviously, our buffer shrank a bit due to each of those things. Once those events passed, we made building it back up a priority, ostensibly because it is the sensible thing to do. But I think the real reason was that we've realized just how much happiness that buffer buys.
*(Note: I changed the wording here, because a commenter pointed out that the original wording was offensive. I don't normally edit posts after they go up, but it seemed the thing to do in this case. I left the original wording in, with a strike through.)
Update: Reading the initial comments made me realize that I ended this post poorly, and took a post that was supposed to be about one way relatively well off people can use their money to buy happiness- and often don't- and made it sound like I think EVERYONE could do this. That is not true. I completely understand that being able to have a buffer requires an income sufficient to live beneath your means- and not everyone has that. But I think a lot of people who could set up a buffer don't.
Also, I left out an important caveat on using money to buy happiness- there are some problems money can't solve. For instance, no amount of money would have made the stress we felt when we thought Petunia might be seriously ill go away. However, our money did make it easier to deal with that stress- we were able to take time off work without fear, for one thing.
Anyway, apologies to anyone I inadvertently offended. Rest assured that unless you are making heaps of money and complaining about how trapped you are in your job because you HAVE to replace your fancy car every three years... I didn't mean to offend you. And even if you are in that group, I really just meant to make you think about your choices.