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Buying happiness! Does spending money affect your well-being?

What do 6 digits mean to you? Do 6 digits mean success? status? happiness?

 Research from Princeton University has shown that self-reported levels of happiness increase with an annual salary of up to $75,000. But after that, more and more money had no further effect on happiness. So what’s the allure of 6 digits? Shouldn’t life be happy? If making $75,000 doing something you love equals true happiness, why do we tell ourselves, “I want to make 6 figures!” In the process, choose the ones that have little interest but that will get us to 6 figures work and industry.

Different sides to the same coin

 The things that bring you happiness can be said to have intrinsic value. This means that they are valuable to you, but do not necessarily represent a standard value for the happiness of others. On the other hand, money has extrinsic value. This means that other people acknowledge that money also has real value and will accept it. For example, you may find pleasure in the smell of lavender, but others may find it less appealing. Each of you assigns a different intrinsic value to the scent of lavender.

 You can’t buy happiness in a store. But when money is used in a certain way, such as buying something that brings you joy, you can use it to add intrinsic value to your life. So, if the smell of lavender brings you joy, you can pay for it in various forms and keep it in your home or office. This, in turn, may increase your well-being. In this example, you use the money to bring you happiness indirectly.

How you spend money

 Buying “experiences” and helping others can lead to happiness. There is some actual research behind this. Findings from a research survey on this topic suggest that spending money on experiences rather than tangible goods, and giving to others without regard for rewards, leads to the greatest happiness. This can take the form of going to a concert instead of buying a new TV, or getting a thoughtful gift for a loved one instead of indulging in impulse purchases.

 There’s another thing to consider: An extensive 2015 survey of the literature on emotions and decision-making found that your subjective judgment of something’s worth has a lot to do with how you feel about the outcome. The authors call this the Assessing Trend Framework (ATF). For example, if you are afraid of your house being broken into, purchasing a home security system may reduce your fear level and thus improve your well-being or emotional well-being.

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