It's a cliché, but Can Money Buy You Happiness?

By Joanne Poh, 24 November 2017 14593

Everyone has an opinion when it comes to how important money is in our lives.

Some think it's the be-all and end-all of our existence, while others insist that how much cash you have has no bearing on how happy you are.

The truth lies somewhere in between.

While sacrificing everything in pursuit of money is a surefire way to land yourself in therapy, planning your finances wisely can really pay off.

With the help of sound financial planning and insurance, the fear of financial hardship disappears, and you are free to focus your energy on everything life has to offer.

 

Not having enough money can be a struggle

  

If you think money will make you happy by letting you buy that flashy car, dress in all the latest fashions and dine at all the hottest new restaurants, you are sorely mistaken.

Countless studies have shown that the key to a happy life lies in maintaining rewarding relationships, not amassing material wealth.

Apparently, even lottery winners return to their baseline level of happiness after the initial euphoria. We can thus assume that becoming fabulously wealthy is unlikely to be the ticket to a truly happy life.

On the other hand, it's important to note that being poor or financially insecure can be a recipe for a whole lot of stress and unhappiness.

For instance, rewarding relationships are important for personal happiness, and unfortunately poverty often makes it hard to spend time with loved ones.

Thus, while you do not need to be clad from head to toe in designer clothing or dine at expensive restaurants when you spend time with friends and loved ones, not having the money to leave the house or share a friend with someone can certainly stand in the way of your maintaining the relationship.

Not being able to pay your telephone or internet bills can also be a hindrance, as so much of our communication with others takes place online.

Similarly, there are some basic necessities without which we would be in a state of chronic stress. These include food, shelter and medical care.

The key to harnessing the power of money to make you happy is thus to channel it towards fulfilling these basic needs, without going overboard and engaging in excessive materialism or using money as a means to plug an inner void.

 

Using money to boost your happiness


One of the most important ways in which money can have a positive effect on your happiness is by offering peace of mind, and ensuring that you don't have to fear financial ruin, or worry about how you will survive should you fall ill, get into an accident or decide to retire.

Luckily, you don't need to be rich to use money to your advantage--you just need to know how to plan.

For starters, financial planning is the key to retiring comfortably. With 4 in 10 Singaporeans unprepared for retirement, this is a major area that is not receiving enough attention in people's daily lives.

Work out how much you'll need to retire at your desired age, taking care to adjust the figure for inflation, and then plan your finances so you can achieve that goal.

For most of us, retirement planning means putting aside money every month, which can be done on most budgets with discipline and with the help of tools like apps that can track your spending.

This money that you've set aside should not all be kept as cash savings, either. That's because inflation erodes the value of cash savings. To help your money retain its value, invest it so it can grow over time.

Insurance is a great option to consider for your financial plan and can be instrumental in keeping you free from the fear of financial uncertainties.

Insurance can function as a savings tool, helping you build up your wealth and preparing you for retirement. On the other hand, insurance also offers you a financial safety net in the event of unfortunate circumstances.

A single unfortunate incident, such as a serious illness or an accident, can easily wipe out every cent you've so painstakingly saved. Buying insurance that protects you and your family in unfortunate circumstances gives you peace of mind and security.

Some insurance products you should consider include health insurance and life insurance. The former offers payouts for medical care, while the latter takes care of you and your family should you die, be diagnosed with a critical illness or become permanently disabled.

 

 

When you're living sensibly and are managing your money wisely, you'll find that life is a lot less stressful than when you're living an extravagant lifestyle with no financial control.

When you don't have to worry about unfortunate incidents bringing about financial ruin or not being able to retire someday, you're better able to channel your energy and money (within your budget, of course) towards the things that can really make you happy--building and maintaining meaningful relationships, giving back to society and growing as a person.

So focus on eliminating fear and putting your mind at rest by harnessing the power of insurance to protect you from harm.

When every cent you spend is targeted at boosting your happiness and removing the fear of financial ruin, then you can truly say that you've learnt how to use money to buy happiness.
 


    

Important Notes:
This article is meant purely for informational purposes and should not be relied upon as financial advice. The precise terms, conditions and exclusions of any Income products mentioned are specified in their respective policy contracts. For customised advice to suit your specific needs, consult an Income insurance advisor.

This advertisement has not been reviewed by the Monetary Authority of Singapore. 

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