People who manage their money are happier

Posted March 10, 2014 by Ryan Howell, PhD

Recent research into the age-old question “Can Money Buy Happiness?” has resulted in some intriguing results. There is now empirical support linking several specific financial strategies to increased happiness and life satisfaction. These suggestions include delaying gratification, savoring positive purchase memories, making purchases that satisfy needs as opposed to desires, purchasing life experiences as opposed to material objects, and, ultimately, spending money in ways that increase psychological need satisfaction as well as in ways that are central to the self.

Also, in today’s world, many consumers do not manage their money well and end up suffering from overwhelming levels of debt. Prominent financial counselor, Suze Orman suggests that “You’ve got to Face it to Erase it”, referring to the need to start looking at and managing your debt. Students in my lab were interested in determining if how one manages their money can also influence happiness. To answer this question they examined people’s responses to several money and happiness quizzes completed by members of the BeyondthePurchase.Org community.

Results indicated that how an individual handles their money (i.e., do they repay credit card debt on time, track their purchases, or save money regularly?) had a great impact on their feelings of security. Also, when people felt more secure, they experienced increased happiness and life satisfaction. Specifically, we determined that individuals who manage their money were happier, more satisfied with their lives, and experienced less negative emotion. Importantly, our findings suggest that dealing with credit card debt and loans has the biggest impact on happiness.

Has your credit card or student loan debt gone unchecked? Developing a repayment plan might not only improve your financial situation, but might actually make you happier as well.

That is one of the reasons we created BeyondThePurchase.Org where we help people make the connection between their spending habits and their happiness. To learn about what might be influencing how you think about and spend your money, Register with Beyond The Purchase, then take a few of our spending habits quizzes. How materialistic are you? Find out by taking the Materialistic Values Scale. Are you a compulsive buyer? Take the Compulsive Buying Scale and learn about your spending habits. Do you manage your money well? Find out by taking our Money Management Scale.

With these insights, you can better understand the ways in which your financial decisions affect your happiness.