Buy Yourself Some Happiness — By Spending Money On Others

There is a whole list of things that money supposedly can’t buy, and one of the things on that is happiness. However, there is research that indicates that money can, in fact, buy happiness. The secret is in the way you use money. When you spend money on others, you are more likely to feel happier.

Spending On Yourself vs. Spending On Others

The idea that you can buy happiness by spending money on others is expressed by Michael Norton, a Harvard Business School associate professor. His TEDx talk on the subject cites studies done in different countries.

Researchers found that those who spent money on themselves weren’t any happier after the experiment. Spending money on yourself doesn’t make you unhappy; it just won’t boost your overall happiness. On the other hand, those that spent money on others did experience an increase in happiness.

The interesting thing is that it didn’t matter how much participants spent on others. Whether participants spent $5 or $20, they still saw an increase in their happiness. It was the thought — and the action of spending on others — that resulted in the happiness.

Norton also cited information from a Gallup poll that indicates that people who give to charity are happier overall than those who don’t. Giving to causes that you consider important, and helping others, can give you an emotional boost that goes beyond finances. It’s a boost you won’t get when you spend your money on yourself.

Spending money with (and on) your coworkers can also make you happier at work. Norton said that when teams of employees go out together, spending money on happy hours, they actually work better. The whole exercise can boost employee satisfaction and even improve productivity.

Don’t Get Carried Away

Just because spending money on others can make you happier in the long run, though, is not a good reason to get in over your head. It’s important to honestly evaluate your situation and consider whether or not you can truly afford to spend this money on others. While you might end up with a happiness while you are spending the money, and while you might feel good about helping out for a few weeks, if you do more than you can afford to do, you might end up in debt — and that causes its own problems.

This is why it’s worth noting that the dollar amount of the spending doesn’t matter. You can be just as happy buying your friend a $5 latte as you can handing over $100. And the conversation over the cup of coffee is probably going to be better than the awkwardness that comes with giving a large amount of money.

Think about what you can afford to do, and think of other ways that you can help. And remember that spending money on yourself probably isn’t going to result in more long-term happiness for you. So, if you have a little extra money, don’t go out and buy something for you, head out and buy something for someone else; you’ll get a better return.

Can You Afford Waiting to Buy?

 If you’re thinking about buying a home, it’s natural to be concerned about whether you can afford to buy right now. It may seem like a good idea to wait until you have more money saved up or are in a better position at work. However, there are many significant disadvantages to delaying the purchase of the home. When you consider these issues, you really need to ask yourself “can you afford waiting to buy?”

Housing Prices Will Go Up

 Housing prices in Australia are steadily going up each year. While there are occasional downturns in the market, Australia’s growing population ensures that properties will continue growing in value. If you wait to buy, you’re likely going to have to spend more to buy your house. It also means you’ll miss out on the gain in value to your house. If you bought a property today, it will become more valuable over time and increase your net worth. Waiting to buy does not.

Housing Payments Build Wealth, Rent Does Not

 If you are renting your home right now, you’re not building any wealth with your rental payments. This money goes towards making your landlord rich, not you. If you buy your own house though, each mortgage payment adds to your net worth as you start to own the property outright. Home ownership is one of the best ways to build wealth because you’re saving money by paying for something you need. The sooner you can stop renting, the sooner you’ll stop wasting this money.

Delays Building Your Credit History

 Your credit history plays a big role in your financial success. If you ever want to borrow money, whether you’ll be able to qualify and the interest rate on the loan will be determined by your credit history. If you don’t have any credit history, it’s important to start building this record as soon as possible. Taking out a home loan and making the payments is one of the best ways to do this. Chances are the terms you’ll get on your home loan won’t be great today, but once your credit improves, you’ll be able to refinance to a better one later. If you continue to delay buying a house, your credit history will remain weak.

Temptation to Spend Savings

 If you’ve got a good amount of money saved up for a home down payment, it will be tempting to spend this money on something else, like a fancy car or big vacation. This would set your goal of home ownership back significantly. It’s tough to stay disciplined for years on end though. If you have this money saved up, you should use it to buy a house before you’re tempted to spend it on something else.

While you shouldn’t rush your decision to buy a house, understand that it’s quite costly to wait.

You should always spend a little time researching home loan options, getting a lower interest rate can significantly reduce the amount you’ll have to repay during the life of your home loan.