05/27/2014 05:40 EDT | Updated 11/17/2014 02:59 EST

Can Money Really Buy You Happiness?

The answer to the age old question is in: money can buy you happiness. But not so fast, because it's not that simple or straight forward. The reality is, what we do with our money each and every day matters.

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The answer to the age old question is in: money can buy you happiness. But not so fast, because it's not that simple or straight forward. The reality is, what we do with our money each and every day matters. How we spend our money in the short term could have long term implications on our financial security. But who can really look that far ahead to see our future self when living a good life today is what matters? The reality -- taking a long term approach to your money while enjoying today's simple luxuries is the key to success.

More money would mean greater happiness for those living on a fixed income or the working poor. For many of us, we wholeheartedly believe that if we had more money we would be happier. For people who have limited resources, more money would provide access to things most of us take for granted. For some of us more money means greater purchasing power and the ability to afford what we want in life. More money means more personal freedom and the ability to choose or make choices defined on our terms. For some it means power and status.

Money is the vehicle or tool used to buy lifestyle, buy comfort, and your happiness. But at every income level there are ways to reach satisfaction. The mean household income in Canada is $76,000. Researchers believe that there is a satiation point of happiness based on household income at $75,000 U.S. What this means is our level of happiness peaks when our income or household income reaches $75,000 U.S. If you make twice this amount of money, you may be able to buy a more luxurious house in a coveted neighborhood, but you are no happier then someone making $75,000. At first glance, this may seem a bit unbelievable.

For many of us it may be hard to believe that there is a satiation point around income and happiness because doesn't more money mean more happiness? I took a quick poll with some friends who agree that at a household income of $75,000 having a good life is possible. Yet, other researchers now believe that income and happiness are directly correlated. In other words, the more money we make, the happier we are. And, if you spend your money wisely on life experiences instead of things, you will be happier. Who to believe? Perhaps there is a different way of evaluating our happiness.

Life satisfaction is a way to view our lives and levels of happiness more holistically. The Gallup-Healthways Well-Being Index collected feedback from over 450,000 people around the world regarding their perceptions of money and happiness. Two ways to look at money and happiness were reviewed:

1- whether more money increases people's emotional well-being or

2- whether more money increases people's evaluation of their life.

Money has the power to give us more choices and personal freedom. If you view your money as a tool, resource or gift you know its value and what it can do for you. If you struggle with finding some meaning behind your money, you may want to redefine it or put your money into the bigger picture or a broader context. Think about embracing these winning strategies.

1. Live your best life, today. Take good care of yourself. Spend your money on nutritional food, on life experiences, and spending time with family and friends. This will increase your happiness levels.

2. Look for satisfaction in your life. By viewing your life more holistically and broadly, you will honestly get less hung up with how much money you have or make but rather on increasing your life satisfaction. Engage in activities that derive the greatest amount of satisfaction in your life

3. Live a goal centered approach. Most people who live by goals feel more in control and happier in their lives because they have a clear vision of where they are going.

Money has the power to make us happy but only to a certain point. But what matters more is living our best life today by living well. Of course, we must aspire for more, but perhaps what more is may not necessarily be 'more money' it may be about spending our money in a way that derives more satisfaction. And, when we live by a set of values and make informed and conscious choices, we have the power to increase our life satisfaction and ultimately our happiness.


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