This site uses cookies to improve your experience and to provide services and advertising. By continuing to browse, you agree to the use of cookies described in our Cookies Policy. You may change your settings at any time but this may impact on the functionality of the site. To learn more see our Cookies Policy.
OK
Dublin: 7 °C Thursday 20 September, 2018

Want to be happier? Try saving more money

Spending helps too (but you’ll need to save first).

CAN MONEY BUY happiness? We’re often told that it can’t, but as Bo Derek said, ‘Whoever said money can’t buy happiness simply didn’t know where to go shopping’.

While that’s a bit flippant, there is an element of truth to it – there has been a lot of research around money and happiness and it’s been found that it’s not how much money you have necessarily, but how you spend it that counts. And even more than that, how you save it.

Secure Piggy Bank Source: perspec_photo88 via via Flickr/CC

How you save it

According to a survey by a US bank, there is a strong link between saving money and happiness. The survey found that of people who had a savings account, 38% felt extremely or very happy. Only 29% of those without a savings account felt that way.

According to the survey, 84% of people felt that having savings boosted their sense of well-being and life satisfaction more than eating healthily, work satisfaction or regular exercise.

Here are the reasons why people said having savings made them happier:

  • 90% said saving helped them face the unknown
  • 90% said saving gave them peace of mind
  • 87% said saving made them feel proud
  • 82% said saving let them be independent

So, should you save every penny you earn in order to be happy? Absolutely not. It’s all about…

How you spend it

Source: Giphy

Research has also been conducted around spending money and happiness. According to Elizabeth Dunn, who wrote a study (with Lara Aknin and Michael Norton) called ‘Spending Money on Others Promotes Happiness‘ which she then expanded into a book, ‘Happy Money: The Science of Smarter Spending’ (with Michael Norton), money can buy happiness – just not the way you think.

It’s not just about what you buy, but how you feel when you buy it. So buying a one-off large purchase (such as a car or expensive item of furniture) may not give you as much satisfaction over the course of its life, as buying multiple €3 coffees and spending time with friends over the same period of time.

According to the research there are five core principals of smarter (and better) spending:

  • Buy experiences (rather than things)
  • Make it a treat
  • Buy time (by paying people to do the tasks you don’t like, for instance)
  • Pay now, consume later
  • Invest in others

Source: AsapSCIENCE/YouTube

Human beings are rewards-oriented animals and tend to live our lives (unless you’re very Zen) striving for the next bright and shiny thing (or pay rise) that will make our lives better. More often than not the things that we strive for are, in fact, objects. So a new house or car rather than a holiday or even a weekend away. But research has shown that buying experiences can make you happier than buying things.

Money and personality

shutterstock_160629524 Source: Shutterstock/wavebreakmedia

Whether you buy experiences or things may actually depend on your personality and spending in the ‘right for you’ can also increase satisfaction.

Another study by researchers at the University of Cambridge, analysed 77,000 financial transactions of 625 participants, and found that there are five personality traits (the ‘Big Five’) which correlate to people’s spending habits. So, if you’re a highly extroverted personality you’re more likely to spend more on nights out in the pub, while conscientious people are more likely to spend more on health and fitness, and so on.

Saving and happiness

If all that wasn’t incentive enough to save, how about the fact that a survey of 2,500 people has found that saving even £50 (approx €59) per month has a direct impact on mood and state of mind? No matter how much money you’re on, making an effort to save some of it, and seeing it grow over time, contributes significantly to peace of mind and feelings of stability. And who doesn’t want that?

Everyone knows saving money can be challenging, but there’s persuasive evidence that it can help happiness levels in the long run.

Does having savings make you happy? Let us know in the comments below.

Whatever your current spending habits, the long-term savings at Electric Ireland are always there for you. Electric Ireland are offering loyal customers rewards for staying with them – a yearly saving of 8.5%. Stay happy with Electric Ireland, the energy provider that’s here for you long-term.

  • Share on Facebook
  • Email this article
  •  

Sponsored by:

Electric Ireland

Read next:

COMMENTS (9)