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I have always been fascinated by studies on the relationship between money and happiness.  As a rough benchmark, once you’re earning more than $75K annually (it varies by state), any increase in pay pretty much does not move the happiness needle at all.  Startling, right? Especially when you consider that that’s for a household, not an individual.  I know a lot of people who earn a lot more than that, but would not necessarily describe themselves as happy.  Something doesn’t add up.

I believe the missing piece for high earners is an objective assessment of your skills (and your potential skills), how you spend your time, and how you allocate your money.  When I first got into diving deep with my finances to make sure I was maximizing my overall happiness and wellbeing, I figured if the studies were true, I should have hundreds of thousands of dollars left over each year to invest in my family’s future, and I should be really freaking happy. However, at the time, I certainly did not have hundreds of thousands of dollars left over at the end of the year to invest. I was spending like crazy because I could, but I wasn’t necessarily happier or better off for it.

While I really wanted to be as efficient as possible in every area of my life, I was also confused about how I could possibly maintain a lifestyle that I was happy with if I reduced my spending so significantly.  But they can’t just publish those studies if they’re not true, I thought.  I didn’t want to be the one missing out on an opportunity to be both happy and wealthy.  

Once I decided to get real about my money habits, I questioned everything.  I was determined to get to that magical number, see if I was still happy, and continue to reassess periodically.  Here’s what I found:

I didn’t actually enjoy a lot of the things I was using money for.  

I started to pay attention, and any time an activity that I spent money on actually annoyed me, it got the axe.  Manicures, for example:  I want my nails to look nice, but I was always irritated about driving to a salon, waiting forever even though I made an appointment, paying someone, sitting still for an unreasonably long time (very difficult for me), and without fail smudging the polish somehow on my way out.  I seriously hated it (can’t stress that enough), but I love pretty nails.  My solution was to start insourcing.

I paint my own nails. I’m actually really good at it, but I wasn’t always. Like any skill, it takes some practice to develop.  Now if the polish chips, I can fix it immediately. I can change the color anytime I want, and I don’t need to rely on anyone else, drive anywhere, or pay anyone.  It’s a tiny example, but it’s very satisfying for me to be able to just take care of things myself on my own terms.  Same thing for facials, eyebrow maintenance and general personal upkeep.  For the most part, I do it myself.

If we extrapolate that across the other areas where we give away excess money to have someone else do things for us, I think the key takeaway is that it’s actually fun and satisfying to do things ourselves and feel useful.  In fact, feeling useful is probably the most important driver of happiness.

If you pay someone else to do everything for you, you don’t feel useful, and if you don’t feel useful, you don’t feel happy (paraphrasing the Dalai Lama).

Now, there are a lot of things I can figure out for myself, but there are also some things I cannot or do not want to do (like electrical work, gardening and haircuts).  That’s where it’s key to really pay attention to how you feel about everything you spend money on, and recruit help when completing a task yourself would not benefit you. Creating opportunities for other people to feel useful when it’s appropriate is a great way to boost everyone’s happiness index.

For example, my husband’s godson is turning one in a few weeks, and his parents could have bought a “smash cake” from a baker and paid a premium for it, but because I was a professional cake decorator during high school and really enjoyed it, I jumped at the opportunity to make the cake for them myself. I did a trial run yesterday and had such a great time reawakening a skill I haven’t leveraged in a long time. Knowing I’m doing something for friends that they will appreciate also makes me feel awesome (pictures to come when I make the “real” one soon).  

I’d invite you to reassess everything you use money for, and consider insourcing as an experiment wherever you can.  You might be surprised by what you find!

Live abundantly!