It turns out, money can bring happiness – if you use your dollars in ways you find value. Whether you’re struggling to make ends meet or are fortunate to have more than you need, we all make money decisions every day. And each one is an opportunity to feel good.   

 

When did you first learn the value of a dollar?

Most likely it was in early elementary school when your teacher went through the various ways quarters, dimes, nickels and pennies could add up to $1. You probably then went home and proceeded to count out the change in your piggy bank – four quarters, 10 dimes, 100 pennies – until you amassed the right combination of coins to purchase that one thing your younger self believed would bring you happiness.

Because to a child, a dollar can buy anything, especially happiness.

So why, then, as we get older and accumulate more dollars (and quarters and dimes) do we somehow become less happy?

To answer this question, we must go back to money basics.

The exercise of your youth was really a lesson in what a dollar is worth. You can exchange units of currency for goods and services because society has recognized and accepted that money holds a certain worth beyond just the paper (or plastic) it’s printed on. This is called an extrinsic value.

Whether or not a purchase brings you joy is determined by its intrinsic value – and, luckily, you are responsible for determining if something is intrinsically valuable or not.

However, when spending money, we often look to external validators. We will spend on items because we believe we need to attain a certain lifestyle. Or, we get caught up in the short-term excitement of having something new and buy for novelty’s sake.

This is what leads to feeling disappointment and dissatisfaction, and is what can fuel a desire to buy more things in hopes of finding fulfillment.

Purchasing with purpose

Let’s say you love cooking. You find the practice of preparing a meal relaxing, and you take pleasure in sharing nourishing food with others.

To take your cooking game to the next level, you decide you’d like to purchase the latest pressure cooker model. Those positive emotions tied to the act of cooking would make the cost of the pressure cooker an intrinsically valuable purchase to you.

Your partner, mother and best friend, on the other hand, don’t share your affection for culinary pursuits, and comment that the extrinsic value is far too much for a piece of cookware. You decide they are right, and instead of putting aside $10 every week for your dream pressure cooker, you treat yourself to other, less-expensive things you enjoy in the moment, but after a while they lose their luster.

A trendy bucket hat, a seasonal candle, a witty print for your home office wall … before you know it, all  those of-the-moment purchases end up costing more than what you would have spent on what you really wanted – a pressure cooker.

Before making your next purchase, take a few moments to pause and ask yourself, “Does this fit with the life I am building?” Take stock in the unique values that make you, you, and imagine how spending your money on this item or experience will bring you closer to – or further from – your ideal life.

The positive effect of paying it forward

Sometimes that purchase might not be on a tangible item. A survey found that those who used money to facilitate experiences and benefit others with no expectation for reward resulted in greater feelings of happiness.

Researchers also found that when giving a gift to others, considering how the recipient would find value in the item every day also brought about the warm and fuzzies.

There are many ways to “pay it forward” that can fit into all budgets. To go back to the example above, maybe instead of purchasing the fanciest pressure cooker on the market, you opt for a middle-of-the-road version. You still can cook up a five-star meal for your family, but now you can also help feed those in your local community by donating the difference to a charity.

Money has its limits

If you think you’d be happier with more money, think again. In a 2010 study, noted economist and psychologist Daniel Kahneman found that there is a certain financial threshold (around $75,000) after which a person’s satisfaction with life no longer increases. As long as basic life necessities like health, relationships, food and shelter are being met, researchers determined internal factors like habits and cultural values play greater roles in determining one’s happiness.

Remember, a dollar is just an assortment of quarters, dimes, nickels and pennies. It is a resource to pay for basic life necessities (food, shelter, health care, etc.). How rich you are isn’t determined by the number of dollars in your bank account – you have the power to decide what a dollar is worth and how money will help build your happiest life.

It turns out, money can bring happiness – if you use your dollars in ways you find value. Whether you’re struggling to make ends meet or are fortunate to have more than you need, we all make money decisions every day. And each one is an opportunity to feel good.