Laura provides tips for using money as a tool for getting more joy from life.
Laura provides tips for using money as a tool for getting more joy from life.
Transcript: https://money-girl.simplecast.com/episodes/8-ways-to-spend-money-for-a-happier-life/transcript
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We’ve all heard the saying “money can’t buy happiness,” and I think it’s largely true. Hoarding money or accumulating wealth for its own sake usually doesn’t bring much pleasure. However, how you spend money can improve your relationships and well-being over the long run.
This post will review eight ways that spending money can create a happier life. Using it as a tool for creating rich experiences and connections can be the secret to getting more joy from your money.
Welcome back to episode 942 of Money Girl–I appreciate you spending time with me! I'm Laura Adams, an award-winning author, on-camera spokesperson, female money speaker, and founder of The Money Stack, a Substack newsletter. I've been providing personal finance tips and advice on this podcast weekly since 2008, with over 44 million downloads.
You can learn more, ask questions, and sign up for the Money Stack at LauraDAdams.com. Newsletter subscribers automatically receive my Money Success Toolkit with the exact templates I use to manage money.
8 ways to spend money for a happier life
The older I get, the more I realize that spending on certain things brings me greater happiness than on others. For instance, the thrill of buying a new pair of shoes I’ve been coveting is fun, but it wears off quickly. My goal is to allocate more financial resources to things that genuinely make me happy.
Here are eight ways spending may help you cultivate a genuinely happy life.
1. Improving your health.
Spending money on anything that improves your health, such as a gym membership, pickleball lessons, new running shoes, healthy food, or health-related apps, is an excellent way to boost your happiness.
Building your physical fitness can not only improve your mental health, but it can also save money by cutting healthcare costs over your lifetime. Staying active and feeling good are cornerstones of a happy life. Plus, you typically meet new people when you become more active in your community.
2. Buying back your time.
Time is invaluable because we can’t make more of it. So, spending money on services that save time can make you feel much happier than buying material possessions.
For instance, paying for house cleaning, landscaping, and grocery delivery is worth the cost to me. Namely, because I don’t like doing them, but also because they take a lot of time that I’d rather spend doing something else, like cooking, walking, or playing tennis.
Feeling like I have more time to do things I enjoy helps me reduce stress. Plus, it makes me feel good to pay people who are experts in their field and are making a living running small businesses or side hustles.
Anytime you can delegate work you don’t enjoy that costs less per hour than your income, it’s a good tradeoff. For instance, if you earn $100,000 a year, that’s about $50 an hour. If you can pay a housekeeper or other service professional to do work you need for less than $50 an hour, you come out ahead financially. Plus, you save time to do work that makes you money or to just relax.
3. Creating shared memories.
Spending money on shared experiences, is one of the best ways to create more happiness. For instance, planning a trip, party, special meal, or looking forward to a concert or reunion with a family member or friend allows you to anticipate the fun well in advance of the experience.
Special get-togethers usually leave you with lasting memories, pictures, and reasons to reconnect with loved ones in the future.
4. Improving social connections.
Many special experiences, such as planning a party or trip, can be costly. However, consider how relatively inexpensive events, such as taking a hike, going to lunch, or watching a movie, can enhance your happiness by strengthening bonds with others.
Sharing experiences and creating a sense of community is fundamental to a happy life. So, don’t think you need to spend a lot to create and share memorable moments with other people.
5. Giving.
Being more generous is an excellent way to spend money and feel happier. It doesn’t matter if you give a server a generous tip for great service, treat a friend to a cup of coffee, or make an anonymous large donation to a charity that you believe is doing essential work.
When you can afford to spend money on other people or organizations, it can create a surprisingly powerful boost in your happiness. Giving reinforces social connections and the perception of ourselves as helpful and caring people.
Giving can be even more satisfying when you see the direct impact of your contribution, such as giving to a local charity where you see positive results or to a cause that’s especially meaningful to you or your family.
6. Learning something new.
Spending money on experiences that allow you to learn something new or feel challenged can enhance your happiness. It could be taking a class to learn a new language, playing a musical instrument, or trying a new sport or hobby.
Spending money on self-development is a wise investment because it typically enhances your confidence and self-esteem, which can be a deeply rewarding experience. Additionally, it provides a break from your routines and the demands of daily life.
7. Saving for the future.
I believe that saving is just spending on your future self. Those with a financial plan, such as regularly investing 10% of their pre-tax income for retirement, are typically happier because they experience less worry and stress about the future.
If you’re unsure how to create financial independence, don’t miss a recent podcast, How to Retire With Over $100,000 of Annual Income. You can actually save less when you start early, and you’ll feel confident that you’ll never run out of money in the future.
8. Creating a legacy.
The desire to leave a legacy is a common aspiration that can significantly enhance your happiness and well-being. It’s about transcending yourself and giving to future generations so they benefit long after you’re gone.
Your legacy could be leaving money to family, friends, or organizations. Or it could be about the choices you make now to contribute to something bigger, like spending time mentoring a younger person, volunteering in your community, or organizing an annual family reunion.
You could leave a legacy by protecting and preserving the natural world for future generations by donating your time or money to organizations dedicated to environmental causes. Knowing that you’re part of a bigger narrative, joining the present to the future, can make you feel significant and happier, regardless of your wealth.
That's all for now. I'll talk to you soon. Until then, here's to living a richer life!
Money Girl is a Quick and Dirty Tips podcast, and I want to thank our fantastic team! Steve Riekeberg audio-engineers the show. Holly Hutchings is our director of podcasts, Morgan Christianson is our advertising operations specialist, and Nathaniel Hoopes is our marketing contractor.