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BLOG: You can’t buy happiness…or can you?

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12/07/2013
Money expert Matt Smith argues that less stuff and more good times are order of the day.
BLOG: You can’t buy happiness…or can you?

Happiness has to some larger or lesser degree always been connected to material wellbeing.

Ever since the fifties the standard of living in the developed world has improved at an astonishing rate, and happiness for many people has been inextricably tied up with this journey. Longer, more affluent living has almost been taken for granted.

Sadly, the credit crunch and recessions of recent times have resulted in rocketing rates of mental health issues as economic realignment takes its toll in human as well as monetary cost. Money might not guarantee happiness, but a lack of it can certainly make you sad.

Recent Australian research that invovled the analysis of 29 surveys over 12 years of research found that a loving partner, a household income of up to USD 100,000 and finding a purpose in life constitute the new holy trinity of happiness. It is not surprising that money figures in the equation, but it is notable that health did not figure in the top three.

This is possibly because people adapt to difficult medical circumstances as a matter of course and can still be happy even if not in great health. Happiness is a state of mind perhaps.

But the role of money in this trinity is not as obvious as you might think. In “Happy Money”, Elizabeth Dunn and Michael Norton demonstrate through a range of behavioural research that the most rewarding ways to spend money are often the very antithesis of your stereotypical lottery advert.

Much like the current National Lottery campaign, fantasies of great wealth often involve visions of fancy cars and palatial homes in far-flung corners of the world. Yet, as (nearly) anyone involved in banking pre-2007 will tell you, satisfaction with material purchases wears off fairly quickly.

What was once exciting and new becomes old-hat. It is far better to spend money on experiences like holidays, interesting trips, meals or even going to the cinema. These purchases often become more valuable with time-as stories or memories-particularly if they involve feeling more connected to others. You might refer to it as investing in good times.

So less stuff and more good times are order of the day. Of course good times are generally more expensive, but quality not quantity is what apparently counts.

Perhaps I am investing too much spiritualism in our species and as the economy starts to find its feet we will witness another bout of high-street (or online) gorging. That might not be such a bad thing. But if I’m right we had better think again about that consumer-led recovery.

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