Turns Out Money Does Buy Happiness
By Heather Callaghan, Editor
“New research is challenging the age-old adage that money can’t buy happiness,” says a recent press release about a new study on the psychology of money habits. To be clear, it is not material possessions that impart this happiness, not a chance.
Once you understand what money really is – only a tool that offers the perceived benefit of more time – you’ll understand why having it – or rather using it to your best advantage – can lead to greater life satisfaction.
Money is a tool for delegation which frees people up to either do what they enjoy or better fulfill their potential. The study, published recently in Proceedings of the National Academy of Sciences and led by researchers at the University of British Columbia and Harvard Business School, has figured out what you probably suspected all along.
That is, it suggests that using money to buy free time like paying for cleaning or cooking, is linked to greater life satisfaction. Of course it is, and it’s rather obvious since that is typically the lifestyle of the rich or middle class. I mean only that they have options for their time and labor whether they choose to engage them or not.
Lead author Ashley Whillans, assistant professor at Harvard Business School, echoed what I think most people secretly believe:
People who hire a housecleaner or pay the kid next door to mow the lawn might feel like they’re being lazy – but our results suggest that buying time has similar benefits for happiness as having more money.
More than 6,000 adults in the United States, Denmark, Canada and the Netherlands were asked if and how much money they spent each month to “buy themselves free time.” They were also asked to rate their life satisfaction and answer questions about feelings of time-stress.
Respondents who spent money on time saving purchases reported greater life satisfaction. The effect held up even after controlling for income.
Here’s the test that you can perform on yourself, too.
In their field experiment, adults were randomly assigned to spend $40 on a time saving purchase on one weekend, and $40 on a material purchase on another weekend. The results revealed that people felt happier when they spent money on a time saving purchase than on a material purchase.
Yet, few people actually make this choice with their money, perhaps due to beliefs.
Even millionaires do not choose this option! Half of the 850 millionaires surveyed spent zero dollars on outsourcing their least favorite tasks. In a survey of 98 working adults, only 2% would use extra funds to save their own time.
Senior author Elizabeth Dunn, a UBC psychology professor, said:
The benefits of buying time aren’t just for wealthy people. We thought the effects might only hold up for people with quite a bit of disposable income, but to our surprise, we found the same effects across the income spectrum.
She notes [emphasis added],
Although buying time can serve as a buffer against the time pressures of daily life, few people are doing it even when they can afford it. Lots of research has shown that people benefit from buying their way into pleasant experiences, but our research suggests people should also consider buying their way out of unpleasant experiences.
I think people are mired in shame about money. They feel shame if they have it and they feel failure if they do not. They may believe they have to don a sackcloth and slave away until retirement – that paying someone to help (or heck, even a Roomba!) is too luxurious for them. They may forget what is really important in order to experience that elusive thing we call happiness.
But, as well all know, time is money – and we don’t have much time here on Earth.
How do you like to “buy more time”? Tell us in the comments below and don’t forget to share!
Resources to Greatly Improve Your Life:
- Is Minimalism The True Secret To Happiness?
- Pound Foolish: Exposing the Dark Side of the Personal Finance Industry
- A 75-Year-Long Study Has Found The Secret To Happiness
- Giving up coffee to balance the books: how many lattes to financial freedom?
- 4-Hour Workweek
- MRI Scans May Have Located The Intersection Of Happiness