Money Can Buy Happiness — If You Spend It Right

It’s not about the rustling of paper, but about the ticking of the clock.

Remember that time is money.

— Benjamin Franklin

Some weeks ago, I bought an online course — for the first time ever. I’m 27 years old now and I have never spent money on that sort of thing.

Don’t get me wrong, it’s not that I have never educated myself before — but apart from books, it usually came from free, albeit sometimes shady, sources.

I’ve been growing up in a very frugal environment, close to the Swabian Alps in Germany. The mentality there is “save money and do it yourself”. A typical Swabian marriage proposal is “do you want to save taxes with me?” (Not really, but this joke illustrates just how frugal they are.)

Needless to say, I’d do everything myself as well. Repairing my motorbike, educating myself about nutrition, training, and bodybuilding, and spending hours figuring out Photoshop instead of paying someone $5 for a logo on Fiverr.

So why did I shell out over $200 for a writing course (not exactly nothing for a student)? Because for the first time in my life, I understood the real value of money: It can buy you time.

Sure, I could’ve figured everything out for myself, but it would’ve taken me years — time that I could spend doing something else. Reading, exercising, visiting family and friends, working, or plain relaxing.

The interesting thing is that I felt great after I spent it — I felt happy because I thought of all the things I could do with the time I saved.

And I’m not alone with that. According to this study, individuals who spend their money on time-saving services report greater life satisfaction and happiness than the ones who spend it on material purchases.

But why does buying time make you happy — and how do you get your hands on it?

You’re Not Spending Money, You’re Spending Time

Time is often mentioned as your most important resource because it’s the only one that is non-renewable. That’s one of the reasons why we’re always short on it and are so happy about any piece of free time we can get our hands-on. You can’t get back the time you lost.

What you can do, however, is avoid losing it in the first place. You have to break the cycle. Usually, you spend your time in exchange for money. You go to work, sit in a chair for at least eight hours, do that five times a week, rinse, wash, repeat — just to have the paycheck coming every month.

Then, when it comes in and all the bills are paid and savings deducted, you spend the rest on stuff. Food, clothing, overpriced Starbucks, a new car, sneakers, a vacation. That’s cool, it’s your money — do with it however you wish.

But there is one thing I want you to keep in mind. Every time you buy something, you’re not paying with your money, but with your time. Again, because for most of you this will take a while to sink in,

Every time you buy something, you’re not paying with your money, but with your time.

And this is where the whole happiness thing comes full circle. The shiny new car you bought — how much time have you spent working for that money? And how much happiness could it have “bought” you if you instead used it to spend your time better or buy back some of it? For a fraction of the price, you could’ve taken a vacation with your loved ones. Get a cleaner for your house so you don’t have to do it yourself. Taken two days off work and surprise-visited your mom. See a therapist to sort out the issues holding you back. Educate yourself, build your skills, and become a better human. Hand in your two weeks’ notice and travel the countries you always wanted to see. Get a dog and walk it. Anything that you enjoy and that makes you happy.

I don’t condemn the purchase of shiny new cars. But what astonishes me is how much money people are willing to put down for material purchases, yet if you asked them to trade in the equivalent lifetime, they’d show you the finger.

Money is time in disguise, and judging by people’s behavior, that disguise is pretty damn good.

How to buy time with money

Fortunately, exchanging time for money isn’t a one-way street. It also works the other way round — you can buy yourself time with the money you earned.

• Buy shortcuts to skills you have to acquire Mastering a skill takes a lot of practice and learning. But you can speed up the process by buying a course or spending some money on a teacher. Instead of slaving away for hours, spend some money on guidance and assistance that will save you from the most time-consuming mistakes in the beginning.
• Buy services instead of doing it yourself Sure, you can do a lot of things yourself. But if you’re at a certain level of income, you have to ask yourself if it’s worth the time. Here’s an interesting thought experiment: According to Business Insider, Bill Gates made $380 per second in the last year. If he dropped $100 bill, it would not be worth his time to pick it up. The same is true for you — if you’re making $50 an hour, spending $20 on a cleaner or $40 on a handyman would be a good investment.
• Outsource your work This really depends on the kind of work you’re doing, but for anyone self-employed, this can be a real kicker. Getting a virtual assistant for the tedious stuff, a freelancer to translate, or someone to build your website can save you tons of time that you can put to better use.

I’ve found that a great way to think about these purchases is not to think about the money you’re spending. Instead, think about the time you gain and what you can do with it — the things that make you happy but you somehow can’t make time for.

The Best Investment You Can Make

Apart from buying yourself time, there is another way money can make you happy.

This one sounds cheesy and has been repeated over and over, but it’s as close to buying happiness and satisfaction as you will get: Invest in yourself.

You are your best investment. Why? Because this investment will last your whole life. My grandma always said: Nobody can ever take from you what you learned.

A car can crash, a house can burn down, sneakers can get worn out, and stakes in a company can lose value. But the investment you make in yourself will stick with you until the end.

Investing in yourself makes you happy because you grow. Whether it’s completing courses, traveling and broadening your horizon, attending classes and events, or getting a professional coach. One way or the other, you’ll become a better person — more actualized, more accomplished.

Growth begets confidence. Confidence begets taking charge of your life. Taking charge of your life begets doing what makes you happy and satisfied.

Invest in yourself.

Shifting Your Mind

Money is all around us. From buying your first ice-cream as a kid over getting your first job to buying your first house or car — large parts of our lives revolve around money. Earning, spending, saving, investing. Stock indexes, the economy, and interest rates. Looking for discounts at the local supermarket.

I don’t think money is evil (I’m a business student after all), but I think it’s terribly overrated. Due to all the fuss that’s made about it, it’s easy to forget what money is at its core: A simple instrument to facilitate exchange. It’s not what you’re worth. Having tons of it sitting in a bank account doesn’t make you happy. It’s not worth sacrificing your health, time, or sanity to acquire it.

Its only value comes from the fact that it can buy other things that we value — such as time, growth, and extra guacamole at Chipotle.

That’s why you have to shift your mindset — don’t focus on money itself, but on how you can use it to achieve happiness and satisfaction.

The first step to do this is to think about how you can use your money to buy yourself more time, not the other way round.

If you’re looking to live a happier life, it’s not just about money. It’s also about balance.