We've all read the studies that show that beyond a certain income level, wealth has little effect on happiness. But according to recent research, the reverse seems not to be the case. Happiness levels do seem to have an impact on peoples' savings habits, with happy people saving more money than the rest. Intuitively, this makes sense to me, often when I'm spending money unnecessarily, it's because I'm self-medicating for other areas of my life I'm unhappy with.
The research also showed that people that held a positive view on aging and retirement saved more for retirement than those with a negative view. Again, this makes sense to me, if you are dreading retirement, it would be pretty hard to be motivated to set money aside for it year after year.
More on this topic at my U.S. News post, Happy People Save More Money for Retirement.
After last week's post about finding health insurance in retirement, I received lots of questions about affordable health insurance options. I've put that all together in my post this week at U.S. News, How to Save Money on Health Insurance.
Related Posts:
Why Retirement Won't Make You Happy
Happy Retirees Turn Off the TV
This is a post from Retirement: A Full-Time Job
Syd,
I thought your primer on health insurance for US News was well done and covered the salient points in a simple and understandable way.
Posted by: dgpcolorado | April 30, 2011 at 08:13 AM
Syd, perhaps it is true on a general level, but for me my ability to save for my (early) retirement had nothing to do with how happy I was. Instead, it was based on big-ticket items such as buying a car, buying an apartment, or paying down (or payign off) my mortgage which reduced my ability to save for a given year.
I did not become some spend-crazy person when I went through an unhappy stretch in my life prior to my early retirement in 2008.
On the health insurance article, I did not see anything about a low-cost hospital-only insurance plan such as one offered by Blue Cross Blue Shield I just switched to beginning in May. A plan like that is good for a healthy person because will protect someone against a long hospital stay due to illness even though it does not offer much protection against anything else. (I am still covered against an injury from a car accident through my personal auto policy.) This is more like a catastrophic plan.
Posted by: deegee | April 30, 2011 at 02:30 PM
Syd... I found your comment regarding spending money as self-medication to be interesting. Reminds me of something I hadn't thought about in years... when I was a young fellow, on those occasions when I was feeling down, I'd spend an evening in the shopping mall, wandering around in search for just the right necktie. These days, I have little interest in either shopping malls or neckties.
Thanks for the reminder. Bill
Posted by: Bill Birnbaum | May 04, 2011 at 07:38 AM
It was Pottery Barn/Crate and Barrel for me (instead of neckties.)
Posted by: Retired Syd | May 04, 2011 at 07:43 AM
People handle their money differently; some invest on it and some spend it! It's just a matter of controlling its fluidity. Some people say that they can't even live without money! Surely, it's not just the material things that money can buy but more so, someone's happiness or someone's hope to continue living is priceless.
Posted by: Kaiser Villaviciencio | May 10, 2011 at 12:25 PM
Budgeting is smart no matter how much money you have. Spending can be very emotional for some people as mentioned and I think saving money takes a unique approach for each person.
Posted by: Kevin Porter | June 28, 2011 at 12:16 PM
Very happy to see your article, I very much to like and agree with your point of view. Thank you for sharing.
Posted by: Broad Financial | July 25, 2011 at 09:31 AM
Lots of people are reading your blog because we can learn something from it. Thanks for giving us the new site. In that way, we can still follow your posts.
Posted by: Medicaid Consultant NJ | February 23, 2012 at 06:10 AM