You know the old saying -- money can't buy you happiness. It makes some sense. After all, lots of very wealthy people are unhappy, while many poor people are happy. Still, just about all of us would welcome being happier -- it's even a part of our Declaration of Independence: the pursuit of happiness.
Fortunately, we needn't flounder alone. There's a growing body of research on the topic -- and much of it can be applied to our financial lives.
For starters, the University of Chicago's National Opinion Research Center has reported that "those with five or more close friends are 50% more likely to describe themselves as 'very happy' than those with smaller social circles." In other words, it's worth investing in human relationships -- by joining clubs, entertaining, going out for meals with friends, or just hanging out with buddies.
Having a circle of financial buddies is also valuable. You can bounce ideas and experiences off each other. Perhaps you have decided to buy umbrella insurance for your home. Tell some friends about it, and they may, too, possibly preventing a massive future loss. You might even consider forming an investment club -- that way you can share research into companies and discuss the merits of various investments. You can stop short of actually pooling your money.
The power of giving
Meanwhile, at the University of British Columbia and Harvard Business School, researchers have found that spending money on someone else can boost happiness -- even as little as $5 per day.
What should you do with that information? Well, as a longtime advocate of saving and investing for retirement, I can't suggest that you give away massive chunks of your income. You'll need much of it one day. But you can (and arguably should) consider being generous toward those in need.
At The Motley Fool, we've raised millions of dollars for some wonderful charities, and we recently dedicated our Foolanthropy efforts to ridding the world of financial illiteracy. I invite you to click in and learn about some very effective organizations that are turning many people's lives around, including many young people. Food and clean water are always vital. But financial ignorance can ruin lives, too.
Would you believe you might also buy happiness at Starbucks (Nasdaq: SBUX ) ? That was suggested in a Money magazine article: "Don't discount the satisfaction you can get from something as trivial as a good cup of coffee. Furthermore, casual encounters with familiar people like the barista at your local Starbucks or the guy at the newsstand have a bigger effect on your happiness than you might realize."
Want another tip? Get a pet. Yes, a pet will cost you money, but four-legged and furry friends have been shown to boost happiness.
One more? Have experiences -- they tend to offer more happiness than possessions. Travel. Have adventures. Yes, Coach (NYSE: COH ) might want you to think that you'll be a happier person with some fancy leather luggage, but spending that money on a Carnival (NYSE: CCL ) cruise or a trip to Paris might make you happier. (Not many people seem to realize this, though -- Carnival shares have underperformed the market for most of the past decade, while Coach shares have been all over the map -- up nearly 130% in 2003, and down nearly 30% in 2007.)
Here's a sneakier way to get happier: Relocate. Some have suggested that one way to be happier is to live in one of the nicest homes in your neighborhood. Realtors probably agree, as it doesn't bode well for your property values, but as you drive home each day, you'll feel good -- comparatively speaking.
Finally, here's a very Foolish way to get happier: Get your financial ducks in a row. We tend to be happier when we feel safe and secure. It's hard to feel comfortable and secure when we know we haven't contributed to an IRA in several years or we've got $15,000 sitting in a savings account, because we haven't gotten around to putting it in that amazing mutual fund we found.
So go ahead and do what you have to do. Dig yourself out of debt. Buy those stocks you want to own. Build an emergency fund. Consult a financial planner and make up a detailed plan for a secure retirement -- or do it on your own, with our help, via our Rule Your Retirement newsletter service, which you can try for free. All these things will help you sleep better at night and be happier.
Remember the words of The Partridge Family: Come on, get happy!