Can Saving Money Make You Happier In Life? Study Says YES!
Can money buy you happiness? Most of us like to believe that money can’t buy you happiness. Well, it may be true to some extent, but saving money can certainly make you happier than you currently are.
“The art is not in making money, but in keeping it.”
Money is controversial to say the least. Some say money is the root of all evil. But we all know we need money to live & survive. So what matters more? Making money or saving it?
Does it make sense to save money?
“The safe way to double your money is to fold it over once and put it in your pocket.” – Kin Hubbard
When you barely earn enough money to pay your bills, how can you even think about saving? I know it may sound ridiculous to some, especially if you have $10 left in your hand at the end of the month. Why should you even bother to save? Well, for starters, it will make you less stressed about your financial situation. And we all need to start somewhere, even if it is not the most comfortable thing to do. If you keep at it, over time you will be able to save a hefty amount and your financial condition will improve. Saving money will give you mental peace. It will give you confidence. It will give you options and opportunities. The more you save, the better it will get for you. Saving is worth all the effort.
We all want to live a comfortable life and be able to face various financial challenges of life with ease. This is where the savings come in. Of course, it’s fun to spend money on the things we need and desire, but having a healthy bank account is even more fun. Have you ever wondered why your parents always pushed you to save money? There’s a good reason for that. And now even science has found a really good reason for you to save: Happiness. Saving money gives you peace of mind, reduces stress and makes you happier in life.
Money can’t buy happiness, but savings can
“It’s good to have money and the things that money can buy, but it’s good, too, to check up once in a while and make sure that you haven’t lost the things that money can’t buy.” – George Lorimer
Yes, money can buy you temporary happiness. And yes, true happiness comes for achieving your dreams and from creating better relationships & experiences. However, studies have found that savings can help you feel happier and more content. While debt leads to higher levels of anxiety and depression.
According to a recent study by Ally Bank, saving money has a positive impact on your sense of comfort, safety, security and well-being. The study surveyed around 1,025 adults in the US and found that you’re more likely to be happy if you save more. In fact, saving more money makes us happier than earning more money.
Take a look at what the Ally Bank survey found:
- Over 38% respondents with a savings account claimed to feel very or extremely happy.
- Only 29% of people without a savings account reported they were very happy.
Among the people with savings account who reported to be extremely happy:
- 57% respondents have saved more than $100,000
- 42% respondents have saved between $20,000 to $100,000
- 34% respondents have saved less than $20,000
- 29% respondents have no savings at all
This data clearly goes to show that the more savings you have, the happier you feel. A whopping 15% rise in the amount of respondents feeling happy with saving over $100,000 clearly proves this fact. Moreover, more than 84% of the respondents surveyed claimed that saving money boosted their confidence and an overall sense of well-being. Having a significant sum of money in their savings account makes them feel happier than exercising, having job satisfaction or eating enjoyable and healthy food.
Savings: The path to freedom and peace
“A simple fact that is hard to learn is that the time to save money is when you have some.” – Joe Moore
The study found that saving money had a stronger impact on feelings of happiness than earning a big salary, as the effect of income on our feelings of happiness become invalid at around $50,000. However, there is no plateau on the impact of savings on happiness mentioned in the research. This is because savings make you independent, worry less, be proud of yourself and experience peace of mind.
The surveyed savers told the researchers that hoarding money made them feel proud and more confident as they are better prepared to face the uncertainties of life. The less you are afraid of being financially broke, the more freedom you will have to choose a lifestyle that makes you and your family happy. However, the survey also found that having deep and meaningful relationships with family and friends is a stronger influence on our happiness than savings.
Debt vs savings
“Saving must become a priority, not just a thought. Pay yourself first.” – Dave Ramsey
Another study that surveyed about 3,751 American adults between the ages of 30 to 80, discovered that both reducing debt and building up investments (or savings) over time substantially contribute to our feelings of financial satisfaction and overall well-being. Upon closer inspection, two researchers from Texas found that increasing assets was a much bigger contributor to happiness than paying off debts.
However, the researchers weren’t sure why saving money was a bigger and more substantial factor than paying debt. But they believe personality of an individual may be a factor as depressed and joyless people are more likely to run into debt.
The psychological impact of saving money
“The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind.” – T.T. Munger
When you save adequate money to face uncertainties of the future, you will experience a sense of financial freedom like no other. Here’s how saving money influences your mental health and makes you happier.
1. Peace of mind
Have you ever laid awake in the middle of the night thinking about how you could afford something your partner needs after paying the bills? Most of us know that feeling. When money is tight, we wonder how we are going to pay rent, how we would take care of our family if we became unemployed and how we can pay for our child’s education. But most of all, we worry about how we will survive after we retire.
Saving money allows us to deal with all of these worries and provides us a financial base on which we can rely on. When you have enough bank balance to pay your rent and bills, to take care of your family and pay for your children’s education for a few months even when you lose your job, your stress-level would diminish significantly. You will enjoy peace of mind and financial freedom and be able to use your energy for more productive thoughts and activities that you will enjoy.
2. Better relationships
No. I am not saying that your relationships depend on how much money you make or save. But having peace of mind regarding your finances can lead to better and healthier relationships. Monetary issues and financial stress often lead to different household problems, breakups, divorces, and even domestic violence incidents.
Financial instability can create cracks even in the most loving and caring relationships. Saving money allows you to avoid the pitfalls of financial stress and focus on building a happier, healthier and more stable relationship with your partner and your family.