The 2019 World Happiness Report was released in March and for the second year in a row Finland was crowned the happiest of the 156 countries included in the index.
The Nordic countries all fared well, with Denmark, Norway and Iceland taking their places right behind Finland. Canada squeezed into 9th place, behind countries such as Netherlands, Sweden and New Zealand. The U.S. came in 19th.
What is it about these countries that makes their citizens so happy? With parts of northern Finland in darkness 24 hours a day for as much as 50 days during winter, it’s safe to assume weather isn’t a factor. So, what it is? And how does money play into our happiness, if at all?
DON’T TELL THE KARDASHIANS, BUT IT’S NOT ALL ABOUT MONEY
Of the countries in the happiness top ten, only Canada is listed in the top ten global economies. The U.S., whose economy has been booming, dropped one place from last year.
Happiness levels actually decreased worldwide despite continued economic growth. We have experienced a worldwide decline in average happiness, despite the general growth in GDP per capita. “This is proof that measuring happiness and life satisfaction in terms of economic wealth alone is not at all sufficient,” said Meik Wiking, CEO of The Happiness Research Institute in Copenhagen, Denmark.
WHAT IS MAKING US UNHAPPY
Neil Pasricha, author of The Happiness Equation shares a similar sentiment. “We live in a time where more is often equated with better. We are never satisfied with the things we currently have. Instead, we think if we have more money, more cars, more vacations… then we’ll be happy.”
One of the factors impacting our happiness is decision fatigue, which makes people low on mental energy. Choice can be a sign of democratic success, but no matter how rational and high-minded we try to be, we can’t make decision after decision without paying a biological price.
When decision failure occurs, we resort to two options,
- Making no decision
- Making a bad decision
In his own example, the author highlights how he sets a monthly reminder to invest money into a particular mutual fund. Every time he went to invest however, he looked at the price. If it had gone up, he thought it might go lower again and so he waited for it to go down. After a while, the money backed up and he had months of dollars to invest and the options began to weigh on him. Anxiety and panic finally set in as he realized the money had just been sitting there for months earning nothing.
The key is to tackling decision overload is to “make space”.
To create more space, you can reserve your decision-making energy by automating certain decisions. You can regulate decisions that are high in time but low in importance.
When Proctor and Gamble reduced the varieties of Head and Shoulders on the shelf from twenty-six to fifteen, it resulted in a sales increase of 10%. The reduction in choice for consumers had a positive effect.
President Obama was also a believer in this philosophy. “I wear only grey or blue suits,” he told Vanity Fair. “I don’t want to make decisions about what I’m eating or wearing. Because I have too many other decisions to make. You need to focus your decision-making energy.”.
Investing is wrought with decisions. What to buy? When to buy? And when to sell? Even if the market is going your way, anxiety can set in around whether to sell now or stay invested for the long term. A 20% return feels much different when it had previously been 30%.
Outsourcing financial decisions may be one way to increase happiness. Unless you are one of those people that love doing it, delegating financial matters to someone you trust will be one less thing to worry about.
WHAT MAKES WARREN BUFFET HAPPY?
The 3rd richest man in the world always has something profound to say about money. “People tend to think that having more money will make them happier. If you have $100,000 and you’re an unhappy person and you think $1 million is going to make you happy, it is not going to happen.”. Even if you earned that million dollars, your happiness will disappear when you “look around” and “see people with $2 million,” Buffett added.
“I wasn’t unhappy when I had $10,000 and left school. I was having a lot of fun.”
Instead of letting your happiness be defined by what you don’t have or how quickly you make money, Buffett said “you can have a lot of fun while you’re getting rich.”
5 WAYS MONEY CAN HELP INCREASE HAPPINESS
While money can’t buy happiness, it does provide us the ability to pursue happiness.
1. Money can eliminate financial anxiety
Money increases happiness by reducing the anxiety felt from not being financially secure. Happiness levels increase once you have enough money to buy basic necessities and can continue to increase with even further spending, although there is a diminishing return once we get past buying luxuries.
2. Money can buy experiences
Money can provide us with the opportunity to create memorable experiences and generate positive memories. But these experiences must be ones you truly enjoy, and not what society says you should enjoy (eg. theater or opera – zzzz…).
Picking up new skills and finding hobbies such as learning a musical instrument or taking up a new activity that we love will also make us happier. Money can also provide us with the ability to do this.
3. Money can help you help others
Sharing wealth with others, especially those people you care about makes people happier. It can also provide time to join a charity and leave an impact on society that can increase happiness. Some of the wealthiest people in the world find happiness in giving back, including Bill and Melinda Gates, Mark Zuckerberg, who plans to donate 99% of his Facebook shares to their charitable initiative, and Warren Buffett who is also donating 99% of his wealth to charity. Their children may not be as happy with these decisions however…
4. Money can buy things that give you more free time.
Money can help us save time. There are many tasks we do throughout the day that we do not enjoy including doing the laundry, cooking, driving and doing household chores.
Money allows you to pay others to do them for you or find ways to automate them with technology. Doing so will free up time so you can do more of what you love.
5. Money can buy things that make you happy
While spending money on frivolous things only delivers temporary and declining level of happiness, buying things you appreciate and will use often will generally make you happier (eg. art, music, etc.).
We’ve Already Won the Lottery
The fact we can read this article means we are part of the 84.1% of the world that can read and are richer than 60% of the individuals in the world who are not connected to the internet, Pasricha reminds us in his book.
We are alive and lucky to be where we are.
Remember that happiness is the end game, not money. Money can support your bid for happiness but it’s also important to ensure that money isn’t the cause of unnecessary stress in your life, so you can focus on the important job of being happy.