Invest in your own happiness

It was almost as though someone had handed me a tool to fix a long-standing problem and it was called ... money! The idea that all I had to do was spend in more fruitful ways seemed far too easy, and yet as soon as I started, I was amazed by the results. For example:

• Stop random acts of spending. If I found myself on the brink of spending $20 or $30 on something only quasi-essential (socks, more soap, another widget from Home Depot), I stopped myself with the reminder that I'd be much happier spending that money on a Pilates class or going out with a friend.
• Buy back your time. As busy as my husband and I are, especially being new parents, I still sometimes think that paying for other people's help or services is a "waste." I'm getting over that, as I realize that by paying for someone else to occasionally clean the house or do the laundry or mow the lawn saves us hours of precious, priceless time.
• Redefine your "expenses." When my dad first retired to New Mexico, the idea of spending $1,000 on plane tickets and a rental car to visit him at least once a year seemed like an onerous expense -- until I realized just how much happiness that money brought me. I went from thinking that money was a loss to seeing it as a huge gain.
• Be the boss of your own happiness. It pays to know what will add to your own joie de vivre. My sister-in-law fell in love with a sleek, modern sectional sofa that cost about half an arm and a leg. She had to work overtime to buy it. Some people might dismiss that as a frivolous purchase. But my sister-in-law says that sofa was one of the best investments in her quality of life she has ever made, and it makes her happy every time she looks at it.

Can happiness make you wealthy?

It's not that these decisions are always easy. Money is tight. Habits are hard to drop. Sometimes shopping just feels good. (They don't call it "retail therapy" for nothing.)

But here's the hidden bonus: An amazing dividend awaits you when you invest in a happier way of life.

Your finances start to thrive.

Here's why: When you spend your money on bills, paying down various creditors and the occasional splurges to keep your spirits up, all your money is going toward things that don't last. You feel caught in a spiral of diminishing returns. The money goes, and it doesn't give back.

When you focus on using your money to boost your well-being, however, you start a more positive cycle. The money you spend increases your quality of life; your life feels richer, so there's less compulsion to overspend -- and your finances arrive at an even keel.

I'm not making this up

There's even some research to suggest that I'm onto something. Tim Kasser, associate professor of psychology at Knox College in Galesburg, Ill., did a study comparing 200 people who embrace voluntary simplicity, a way of life that's less oriented toward money, status and stuff.

When he compared this group to a sample of 200 average consumers, he found that the "simplifiers" were much happier and more satisfied with their lives -- even though their incomes were lower (an average of $26,000 per year versus $41,000 for the control group).

Not only were they happier, but Kasser and his co-author, Kirk Brown, a psychology professor at Virginia Commonwealth University, found that these folks were also less inclined to overspend and more likely to say they were careful about how they used their money and other resources.

No, he didn't compare savings rates or which group had less debt or made the better real estate choices. But Kasser thinks there's a financial benefit to living a life that truly makes you happy.

And I do, too.

Published June 13, 2007

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