Researchers have studied the correlation between money and happiness and found that being rich does make you happier – to a point. According to recent data, people in the US are happiest when they make $75,000 to $100,000 per year. It seems that the key between the relationship of money and happiness is financial independence. Not having to worry about bills and other stress that lack of money creates, gives you more time to pursue activities that you like, which in turn helps your brain create and release the chemicals most associated with being happy. This freedom certainly helps foster a good environment for happiness, but beyond finances, successful people must also manage the other aspects of their life to remain content.
Taking the First Step
Building enough wealth to be financially independent is easier said than done, and significantly depends on the community and environment you grow up in. However, most Western societies, despite some bumps and setbacks, are making progress towards upwards mobility in financial classes by investing into resources like public education. For people that are already in a difficult financial state, services exist where people can remove bankruptcy from their credit, consolidate debt, and make small investments that help to grow wealth over time. With significant preparation and lifestyle/money management, people from low-income situations can work towards building enough wealth to achieve financial freedom.
The Tricky Work/Life Balance
Conventional wisdom tells us that striking a perfect balance between work and play is the ultimate way to achieve happiness. However, research suggests that truly being happy is more complicated. A more practical approach to making money and being happy involves financial freedom. Of course, achieving this “freedom” is left for individual interpretation, because the more money people make, the more expensive their lives are to manage. This means that millionaires often need to spend millions just to maintain their lavish lifestyles, which often don’t make them happy in the first place. So while having money gives you financial freedom in theory, you must be able to reduce your spending so that your expenses are manageable. Simple actions like budgeting, and spending only on things that you truly enjoy are ways to manage your money so it makes you happy, not stressed.
Properly managing your money is a skill that takes years to develop. Managing your happiness is another challenge entirely, but mastering both of these skills is necessary in order to strike that coveted balance of wealth and happiness. Of course, it’s important to remember that life is never going to be smooth sailing, and learning from the bumps in the road can go along way to build up the mental toughness required to be successful. Taking the time to truly prioritize what brings you joy, and putting forth the effort to manage your life and money are almost certainly a recipe for happiness.