Whoever said money couldn’t buy happiness must be defending their circus and performing arts degree to their in-laws.
Who thinks earning money doesn’t make you happier? And I’m not talking about a Dave Chappelle mo’ money, mo’ problems scenario — I’m talking about the difference between having a $20,000 a year income versus $1 million.
Studies show people who earn more than $500,000 in yearly income are twice as happy as those who earn between $30,000 and $40,000.
While this evidence suggests more money means more happiness, this isn’t necessarily the case. Harvard professor Michael Norton says in his book “Happy Money” wealthy individuals are no happier as wealth increases.
A popular 2010 Princeton study found income above the $75,000 level does not add to day-to-day well-being.
This study gives us all hope we don’t have to be Donald Trump rich to be happy. However, we can all think of people who live comfortably, but are miserable. But what’s the difference?
The truth is money can buy happiness. There are five basic principles to buying happiness: buy experiences, buy time, make it a treat, invest in others and pay now, consume later.
First, things don’t make you happy ­— experiences do. A 2010 Cornell study found when pairs of strangers talked of purchases made to increase their happiness, those who talked about experiences enjoyed the conversation more. The partners even liked each other more than the pairs who had talked about material purchases.
However, our generation is the number one offender of idolizing material possessions. If you don’t have the iPhone 6s “Star Wars” special edition with bonus selfie stick, are you even trying to fit in?
We know we have more fond memories about the time spent with friends drunk and remember less about what alcohol you got drunk from. Yet, if I gave you $300 right now, I’d wager 80 percent of you would buy a new phone and not think of spending that money on a wild time in New Orleans.
Some of you are saying you’re too busy to take trips to New Orleans or spend an afternoon out in nature. This brings us to the second principle — buying time.
How much would you pay for an hour of free time? It’s a difficult question to answer. It’s strange to think of placing value on your time, but you should treat it like any other limited resource.
Small actions in life, like vacuuming, are replaceable by hiring someone to clean for you or buying an iRobot Roomba. By doing this, you have bought more time in your life to enjoy doing what you like.
The third principle of buying happiness is to make it a treat.
You’d think if we lived our lives with an abundance of chocolate, we’d be happier than only having chocolate once a month. However, studies show the more exposure to something, the less pleasure we take from it.
This happens in the commercial world all the time. This is why pumpkin spice lattes and the McRib are so popular– because they are offered for limited times.
Instead of buying yourself Starbucks every day, try just once a week.
The fourth principle is to invest in others. It sounds like it makes no sense, but spending money on other people will give you more happiness than any of the other principles.
A Harvard Business School study found when researchers gave random people money with instructions to either spend it on themselves or spend it on someone else, those who spent the money on someone else were happier.
You can combine this principle with other ones to increase happiness. Pay for you and a friend to do something fun together. Now you’re buying an experience and investing in others.
The final principle is pay now, consume later. Why in the age of Amazon same-day delivery drones would you want to pay for something before you receive it?
The answer is surprising, especially today when most of us pay with credit. Much of the happiness from a purchase comes before you receive your item.
Think of a childhood birthday when you wanted a new video game. You spent weeks imagining and living in the fun you were going to have while playing the game, Then you finally play the game and beat it in two days.
If you got the game immediately, you would have missed weeks of happiness.
Pay now, consume later can also been seen in the recently popular subscription box business — think Birchbox. Every month you pay a fee, but when your makeup arrives, it feels like you’ve received free makeup.
As college students, we want to make as much money as possible in the future. However, we should remember happiness doesn’t come from earning money, but rather how we spend it.
Jay Cranford is a 21-year-old finance senior from St. Simons Island, Georgia. You can reach him on Twitter @hjcranford.