How money can buy happiness! – Part 1

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At one time, when negotiating a raise, my manager at the time told me “But Sam, I read some research showing that more money doesn’t actually make you happier or more satisfied at work.” “That’s great news!” I said. “Then you can take a 10% pay cut and give that money to me without losing any motivation!” This worked about as well as you could expect it to, and I fired this manager from my career within a year.

Picture symbolising the love of money
Money can’t buy love, but it can buy a Ferrari, and I love Ferraris!

If our parents were raised to pursue career and money, my generation has been raised to believe that “money isn’t that important (as long as you have enough)”. Research seems to support this to some extent: once you can afford a relatively safe, comfortable life, where you can take care of your family and pursue at least one of your interests, it is hard to spend your way to significant happiness… or so the data says! I think everyone can agree that if you have very little money, a bit more can make a big difference. The difference between being able to pay rent, and being evicted, is huge. Especially if you live in a country where it’s dark and cold half of the year, and rains 80% of the time. However, I am a strong believer in the idea that even if you’re well off, money CAN significantly improve your happiness IF you use it wisely. Here are some ways you can use your money to directly influence your happiness:

Buy time

“Whomever said that time waits for no man clearly didn’t spend much time in meetings. I’ve met people who could seemingly invert the flow of time by the use of powerpoint and excessive use of the word ‘digitalisation’.”

Simply put, if you’re working today, you are most likely trading your time for money at a very unfavourable rate. While skill, education and the mythical “talent” plays into HOW much money you get for your precious time, the vast majority of us are still being paid at an hourly rate, either directly by billing per hour, or indirectly by contracts where we work a minimum amount of time each week for a set amount of money. If you are lucky you get overtime.

Selling your time for money is always going to be a bad deal, because time is a finite resource; you only have 24 hours a day, and you can’t easily get more of it. I am convinced that part of the reason why money so often fails to bring happiness is that people get more money by working longer, more stressful hours. Overachievers work long hours while chasing a promotion and a big payout, but when they get it, they do not have time to enjoy it. The new career brings with it more work and no satisfaction. In the best case, they spend their new-earned wealth on status symbols, and then end up working even more to make the payments on those status symbols. In the worst case, they find themselves with nothing left except work. More than one successful person have lost their loved ones and even themselves to the “busyness monster”. 

Traffic jam
Your life on busyness

We know that we need some money to be entertained, safe, warm and fed. Let us assume that your baseline for “enough money” is making $50 000 US/year; this amount lets you live at a comfortable level, provide some security for your loved ones, and allows you to pursue at least one moderately priced hobby. At this point, you should change your focus from trying to get more money to trying to get more time to be able to enjoy the money you are making! 

The most obvious way to do this is to cut back on the hours you’re working. If you’re making money above your baseline working in a high-demand field, you may be able to trade your full-time position for a part time that pays less and still stay above your baseline, but many part-timers end up working the equivalent of full-time in unpaid overtime anyway. The easiest way is probably to go into consulting, which I strongly recommend if you like the idea of being self employed, and get more happiness out of freedom than the illusion of the security of a steady job. Some consultants also manage to tie their compensation to a result rather than a number of hours worked, which is great if you’re able to do your job quickly. But consulting isn’t for everyone.

The easiest thing you can do, that doesn’t have to cost much (but as always, having the money helps) is reduce your commute, or make the commute more efficient. Ask yourself how much time do you spend traveling every day? Even a short commute adds up to several hours a week; when I completed an assignment within walking distance and took on one with a fairly short (35 minutes one way) commute, I lost 12.5% of my free time every day! I would bargain long and hard before I accepted a 12.5% pay cut, yet I take this commute for granted. A longer commute can easily add up to 2 unpaid hours of work every day, and if you travel during rush hours, it’s unlikely to be a comfortable two hours! If you have a good idea that you will work in a certain area for the foreseeable future, seriously consider re-locating to shorten your commute. If you do not know where you will be working tomorrow (if you are a consultant, for example) the best thing is to make sure you live close to a major communications hub. If none of these are viable, try to negotiate for flexible working hours or being able to work from home a couple of days a week. I turned a slow, dull 35 minutes drive into a relaxing, enjoyable 15 minute cruise on empty roads by leaving home 20 minutes later every morning. Rush hour traffic doesn’t just waste your time, it drains your energy as well, so being able to avoid it is a double gain for your happiness. Which hours you work can be as important as how many hours you work. 

Finally, you can take a cue from Tim Ferris and try to outsource part of your life. While not all of us are comfortable with getting virtual assistants, chores such as cleaning, laundry and cooking are easily outsourced. An alternative is to simply remove

Of course, getting more time doesn’t matter if you use it poorly. Don’t waste it on Netflix or browsing Facebook. Meet up with an old friend, read a book to your children, take your dog for a long walk. Use your money to buy time, and use that time to buy life. And don’t worry so much about “letting everyone down” by not making money above your baseline. Yeah, it’s nice to buy your partner presents and giving your kids all the toys they are dreaming about, but look back at your own life: how many of those toys and presents you got are still a big part of your life? Speaking for myself, what I remember from my life isn’t the toys and games (though I no doubt enjoyed those too), it’s memories of my mother reading to me as a kid, of my dog falling asleep with his head in my lap, of helping my grandmother in the garden, or my grandfather teaching me the basics of woodworking (and managing to do so without me losing any fingers, bless the man). I remember people taking time to be with me far more than I remember how fancy of a house we were spending time in.

Well, this turned out to be a LOT longer than expected, so this article will be a two-parter. Part 2 coming next week! Until then, take some time and rest up 🙂 

/Sam

Image By Rgoogin at the English language Wikipedia, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=8931241

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