DOES A NEW CAR MAKE US happy?

We spend more on ma­te­rial items, think­ing we will be hap­pier, writes

CityPress - - Business -

Ihave spent the past week in­ter­view­ing po­ten­tial can­di­dates for the Absa/City Press Money Makeover com­pe­ti­tion. It is so in­ter­est­ing that al­most all ap­pli­cants state that their big­gest fi­nan­cial mis­take was buying a new car.

As one ap­pli­cant said to me: “I feel so de­pressed when I just think how much money I would have now if I had in­vested rather than spent it on car re­pay­ments.” For him the car was a missed op­por­tu­nity for wealth cre­ation, but for oth­ers car re­pay­ments are an al­ba­tross around their necks, af­fect­ing their abil­ity to meet other needs. One ap­pli­cant re­cently had a child and now finds that he can­not pro­vide a home and ed­u­cate his child while the car re­pay­ments con­tinue.

There is not a sin­gle per­son who says they are still glad they bought the car – all of them wish they could go back in time and make a dif­fer­ent de­ci­sion. Spend­ing 30% to 40% of your salary on a car each month will not help you in achiev­ing fi­nan­cial freedom.

If only we un­der­stood this be­fore we signed up for new wheels be­cause one thing is ab­so­lutely clear – a new car will not make you happy.

Pro­fes­sor How­ell, an as­so­ciate pro­fes­sor of psy­chol­ogy at San Fran­cisco State Univer­sity, un­der­took a re­search study on money and hap­pi­ness and found that ex­pe­ri­ences, rather than ma­te­rial goods, bring longer-last­ing hap­pi­ness. That means spend­ing money on a fam­ily hol­i­day or go­ing to see your favourite rock band would give you greater satisfaction than buying a car or de­signer hand­bag.

How­ell’s study found that de­spite this, we tend to spend more on ma­te­rial items be­cause we think that, as a new car lasts longer than a fam­ily hol­i­day, it will make us hap­pier. How­ell ar­gues that a fancy car or a new pair of shoes will pro­vide a brief thrill, but we soon take it for granted, while ex­pe­ri­ences pro­vide more last­ing value.

In my ex­pe­ri­ence, both in my per­sonal life and in my en­gage­ments with or­di­nary South Africans, I believe that it is not money in it­self, or what we buy with it, that makes us happy, but the lack of fi­nan­cial stress that money, used cor­rectly, can pro­vide.

If you knew you had enough money not to worry about pay­ing the bills and were on track fi­nan­cially to re­tire one day, you would be sig­nif­i­cantly hap­pier. Imag­ine the feel­ing on wak­ing up to­mor­row with no debt! Yet what do we do when we get more money? We spend more.

If we spend money on things to make us happy, which end up putting fi­nan­cial strain on our­selves, we go from tem­po­rary hap­pi­ness to very real un­hap­pi­ness and des­per­a­tion.

So, if you re­ally want last­ing hap­pi­ness, don’t spend money on things that will put you un­der fi­nan­cial stress.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.