Your paycheck has more power than meets the eye. While it can help us to afford life’s necessities, it’s also a key source of happiness. In fact, studies show that how much you earn, how you earn it and how you spend your hard-earned dollars can make you happy.
Let’s start with the size of your paycheck. Think if you made more money you’d be happier? Researchers at Princeton University say the magic number is actually $75,000 a year. The study concluded that people at that income level make enough for life’s necessities with a little extra left over. This results in high levels of emotional well-being. But making more than $75k doesn’t necessarily mean more happiness. They found this holds true even in expensive cities like New York or London.
Hit the Gym
Does your paycheck fall short? You can always ask for a raise. As one study proves, a way to get closer to a promotion is by staying fit. Therefore, investing in either a gym membership, home exercise gear or a fitness app may pay off.
A recent study from Cleveland State University reports exercising three times a week can lead to 6% higher pay for men and 10% higher pay for women, on average. It turns out improved physical health improves mental health, along with increased energy and lower stress levels — all leading to more productivity and, ultimately, more money.
Save money along the way by working out with a friend. Many personal trainers offer special group rates of up to 40% off when you bring along a buddy.
Invest in a Passion
Another way to hit that $75,000 marker could be by becoming your own boss. A recent Gallup poll found even stressed-out entrepreneurs are happier than 9-to-5 corporate employees. Seventy-one percent of entrepreneurs say they learn or do something interesting at work, compared to 66% of traditional workers. But you don’t have to quit your job in order to become an entrepreneur. Many workers have managed to make more money by simply pursuing a passion on the side from the comfort of their homes.
Invest in Leisure
Next, get more satisfaction out of your spending by investing in leisure activities, such as a trip to Italy, concert tickets or a massage.
In a 2011 paper published in the Journal of Consumer Psychology, 57% reported the greatest happiness from spending money on experiences, compared with just 34% who derived happiness from buying material things. Why? We create lasting memories with friends and family when we invest in activities, but our excitement over a new car or that designer dress wears off quickly. Bottom line: A cruise may do more to make you happy than a flat screen.
Finally, the easiest way money can make you happy is to be generous. Researchers from Harvard Business School and the University of British Columbia surveyed more than 600 volunteers and found that spending as little as $5 a day on someone else makes people happier than spending that money on themselves. Whether it’s making a small donation to a charity online, or buying a latte for a friend, the emotional boost will feel priceless.
As always, we want to hear from you. How does your money make you happy? Connect with me on Twitter @Farnoosh and use the hashtag #finfit.