By Money can’t buy happiness, right? Or can it?
In the words of country star Chris Janson, “I know everybody says money can’t buy happiness. But it could buy me a boat. It could buy me a truck to pull it. It could buy me a Yeti 110 iced down with some silver bullets.” This summer, we’re going to spend a little time exploring the topic of money, specifically what exactly it can and can’t buy.
Of course like Chris says, it’s common knowledge that money can buy plenty of things, and the conventional wisdom is that money can’t buy happiness. But it might not be that simple.
Whether it’s a boat, a sports car, an exotic trip, or simply a pool in your backyard, this is the time of year when many of you are enjoying the fruits of your labor, and being reminded of what money can buy as you enjoy this beautiful summer. Personally, I’ve had the privilege of spending money on cold air via repairs to my conditioning unit! (And please don’t spend your dough on any of these silly money-wasters!)
All foolhardiness aside, there are plenty of temporary things we can spend our money on – possessions. At the end of the day, we all work hard in our professions. Even my three-year-old, Michael, realizes this – every evening when I get home he says, “Were you at the office making money Daddy?”
I don’t know how you grew up, but I grew up in a family where my father taught me that if you wanted something, you worked hard and earned it. I was never told I needed to work less for something, nor was I ever told I would get any handouts in life. Most importantly, I was never told I couldn’t have something – I simply needed to work harder for that particular thing. And yes, I did get my $120 Air Jordans back in the ’80s! My next new pair of sneakers were Converse though – those Jordans were expensive, and it was my money after all.
A couple of recent studies on money have actually indicated that money can bring increased happiness. However, it’s not simply a matter of more money meaning happier people. One study from a couple of years ago found that up to the point of covering basic life needs, money did make people happier. But beyond that point, money had little correlation with happiness. A study released in April found that money can buy happiness – provided that person is spending money in line with his or her values and personality type. Experiences over material possessions also tend to make people happier.
Keeping up with all that stuff people buy after their basic needs are met often ends up just creating more stress. The boat breaks, the muffler falls off that sports car, the second home has a leaky roof, the Lear Jet doesn’t pass inspection and the housekeeper steals from you. For some of you reading this, those are everyday things, and others of you are wishing you had those problems. But for each of us, there is a tipping point where money in and of itself will not and cannot buy more happiness.
The study cited $50,000 to $75,000 as the tipping point range, but I don’t believe those numbers necessarily apply to you. You are already an above average American family simply because you’re working with us (or reading this newsletter)! But, as you’re enjoying your summer fun, taking that vacation with or without the kids, or as you’re considering a major purchase like a boat, please don’t spend on impulse. Really take the time to think about the maintenance and upkeep you’re also buying, and consider whether it might be better to rent or lease for a year. Also consider any other expenditures that might benefit you and your family more than this particular item.
My message isn’t that you can’t have the things you want. It’s fine to have stuff – honestly if I didn’t like stuff, I’d be a hobo on the street hoping someone would help me out from time to time. But when it comes to stuff, perspective is important. All too often, when we get exactly what we think we want, we realize that what we lusted after wasn’t what we wanted at all.
To boil it down, when it comes to your money, you’re either going to spend it, save it, or give it away. Make sure your hard-earned money is going to the things you hold true and dear. If we can help you along this road of self-discovery, let us know. And if you do have a boat, I’d love to be your friend for the summer!
Article by David Smyth, CLTC, Senior Partner at Family Financial Partners — a financial services firm in Lexington, Kentucky.