This column is normally all about saving and spending wisely. But isn't the greater goal of managing our finances to produce happiness?
If the pursuit of happiness were an Olympic event, the United States would be nowhere near the medal ceremony. In the latest World Happiness Report, the U.S. ranked 19th among more than 150 countries. (For those open to the expat life, Finland, Denmark and Norway held the top three spots.)
Stagnant wages and a widening income gap jump out as two powerful stress points for American households. But the notion that a person's life would be happier if they had more money only works up to a point.
Research from two Nobel laureates finds that once our annual income reaches a certain level -- about $88,000 in 2019 dollars -- earning more doesn't ratchet up the everyday emotions that make us happy, although earning more does boost our longer-term notion of life satisfaction.
Making more money is not entirely within our control. But there are all sorts of things we can do to boost our happiness. Some may sound obvious, but it's nice to know they've been validated by academic researchers.
Eight hacks to boost your happiness
--Invest in relationships. Starting in 1938, researchers set out to track more than 700 (then young) men over the course of their lives to explore what drove happiness. The study continued into this decade -- tracking participants in their 90s -- and is now focusing on the children of the original participants. Regardless of background, the defining driver of happiness was having good relationships. A TED talk by the director of the happiness study went viral.
--Focus more on time, not money. When researchers asked thousands of Americans to choose between having more time or more money, nearly two-thirds chose money. But when put through a series of questions to measure a self-reported sense of happiness, it was the folks who chose more time who were happier.
Related research finds that spending on goods and services that give us more time helps boost happiness. Maybe that's take-out a few times a week or cleaning help. This doesn't need to be a budget buster; the peak payoff in spending-to-save-time was $200 monthly.
--Spend on others. In a study, people were given $5 and told to spend it. Those that were given the instruction to spend it on someone else (rather than themselves) reported higher levels of happiness.