Money DOES buy happiness


Does money serve you? Does money make you happy? How do you use your money? Does money really buy happiness? All those questions are important. And if you don’t know how to answer, that’s fine. I have the answer for you. Why science studied the question, and was able to determine that YES, money buys happiness. If you use it correctly.


Each person has a standard of living they want and require. With which they feel calm, happy. You don’t have to be a multi millionaire for money to make you happy. According to studies by Purdue University and the University of Virginia, most people find emotional peace in North America with a range of $60,000 to $75,000 a year, and $95,000 for satiety. Above this level, it is nothing more than luxuries without which life can still be very pleasant.

Basically the result of these studies is obvious: Reaching those income levels allows peace of mind and security. Relieves stress related to bill payments, rents, basic needs such as food, water, electricity, gas etc … Provides a sense of financial freedom, resulting in being able to enjoy life instead of wondering how I am going to survive until the end of the month. On the other hand, low income is a factor of personal pressure that makes any unplanned event can be the end of life as they know it. It can be a medical emergency, a divorce, a car accident, a house fire. All life risks associated with major expenses are hard weights to bear without financial freedom.

The Journal of Public Health published results of a very interesting study about the correlation between low income and depression. It shows that by achieving financial freedom, people lower their long-term risk of mental illness versus low-income people.

What does that mean then? If you have already reached that average level of $60-95,000 per year and you are not feeling happy, you need to learn how to use your money. It is important to change your mindset (way of thinking) and read about money management. Because at that level you should feel liberated, less stressed, and happier than the average lower or middle class.

If you still do not reach that income level, the first step is to know your financial numbers. It is important to know how and how much one can spend per month. Have a fixed, variable, and savings plan in order to establish financial security adapted to your income level. Having savings for emergencies can lower your stress level considerably, an important step towards inner peace and happiness.

Now, you also need to know how to spend. And there are some examples of expenses that can fill you with happiness.



1- Spend on your loved ones

It’s been proven by Oxford, Harvard, and a range of different studies over the years: People who spend on family, friends, and charity are happier. And being present at the moment that the person(s) receiving the gift/donation and being able to witness the happiness caused by it increases your level of happiness even more.

Have you given a gift to a relative? Maybe a child? Did you see that smile on his face? How did it make you feel? Whether it is something that changes one’s life, or simply a detail that means a lot to the other person, that makes them feel loved, important, even safe at times, is something that will make you happy. It doesn’t have to be expensive. Just the gesture is sometimes enough to fill you up and fill her with happiness.

Improving the lives of others will improve yours.

2- Spend on experiences

If you read Are you a smart spender? You know that spending on things will not fill you with happiness. But creating memories will. Spending your money on trips, experiences, unforgettable moments will fill you up much more than any phone, car or house. Why?

  1. It create connections. The people who share the experience with you, whether they are people who accompanied you or people you met during said experience, you will feel a special link forming between you and them. And you know that it is human to want to get closer to others.
  2. An experience is prepared. Several studies show that the preparation time, the anticipation of the event, represents almost 50% of the best memories of the experience. In addition, they also show that throughout the anticipation time your level of happiness rises dramatically until the beginning of the experience.
  3. Memories are usually even better than what you actually lived through. People usually retain the best moments of an experience and unconsciously enhance them in their brain, making them even happier and more nostalgic when they are remembered.
  4. The impact lasts much longer than buying a material thing. (see Are you a smart spender?)

3- Buy lost time

Here many are going to think “what is he talking about”? Well, let me explain: Of all that money can buy, time is the most valuable. Professor Elizabeth Dunn, writer of the book “Happy Money: The Science of Happiness Spending” says the following:

“Don’t buy a car a little fancier to have heated seats during those two hours of transit to your office. Buy a spot close to work so that you can use that final hour of daylight to kick a ball in the park with your kids”.

That is an example. But you can’t just buy that time in traffic. How much time do you spend a week cleaning your house? How much time do you spend grocery shopping? There are a multitude of examples of tasks that you could avoid by paying a service or a person to do it for you. All of this is possible. By having a spending plan. The more time you free up in your schedule, the more time you can dedicate to people and activities that will fill you with happiness. It doesn’t mean being lazy, it means knowing how to drive:

  1. Your time
  2. Your money

And this has no cost.

4- Your perception

In short, your happiness depends on how you perceive your life, your money, your time, your goals etc … Happiness is lived according to your mindset. What is the story you tell yourself about your finances? Is it positive, or does it limit you in your dreams and goals? If your story doesn’t make you happy, change your life.

You have to know how to be grateful in life. The more grateful you are, the happier you will be. Also read: Open your mind, fill 6 areas of your life to be happy

Related: What is the meaning of being rich

Manage a monthly budget


If you want to gain more control over your spending and start working toward your financial goals, you need a budget.

A personal or family budget is a detailed summary of income and expenses expected for a defined period of time, usually for a month. While the word budget is often associated with restricted spending, a budget really should mean more efficient spending.

A budget will show you the amount of money you expect to contribute against all your expenses, from required expenses, such as house and rent payments, to pleasure expenses, such as entertainment. Instead of viewing a budget as a negative, you can view it as a tool to achieve your financial goals and avoid bankruptcy.



As a personal financial planning tool, a written monthly budget allows you to plan how you will spend and/or save your money each month and also how to control your spending patterns. While budgeting may not seem like the most exciting activity (and for some, it’s downright scary), it’s vital to keeping your financial house in order, as budgets depend on balance. If you spend less in one area, you can spend more in another, or you can save that money for a larger future purchase, build a fund for a “rainy day” or even for retirement.

Before you start budgeting, it’s important to realize that to be successful, you need to provide the most detailed and accurate information possible. Ultimately, the bottom line of your new budget will show you where your money is coming from, how much is there, and where everything is going each month.


Creating your first budget can be extremely overwhelming. So overwhelming, in fact, that only 15% of Mexican families have an active monthly budget. But it is worth the effort. Developing a budget that you can stick to for the long term has definitely been linked to building wealth, while at the same time helping you get out of debt and reduce your expenses.

When I built my first budget several years ago, I knew roughly how much money I was making annually, but I had never broken down my expenses by category to find out how much I could pay on a recurring basis or how much money I could pay regularly. Invest. Save money.

In short, you were spending money on the things you needed and wanted without first determining whether you could actually afford them. After emptying my checking account once or twice, and having to pay off multiple credit card debts due to my lack of budget, I decided to get real and start a budget.

If this is the first time you are making a budget, here are 11 steps to make the process as simple as possible.

  1. Determine how much you have
    If you have savings, checking accounts, investment accounts, or any other financial instrument, you’ll want to know how much money is in each account, as well as the interest rates and expenses for each. Take note of this information as it will be important in determining your net worth and the best use of your capital in the future.
  2. Determine how much you earn
    For some people, this is easier than others. Those wage earners can easily find their monthly income. For hourly employees or those who run a business where income can unpredictably rise and fall, this can be much more difficult. The most important consideration, regardless of how you earn your monthly income, is determining the average monthly amount of income you receive. A good way to do this is if you receive irregular income, it is to average the last 6 to 12 months of recurring income and use that figure. If you want to be more conservative, you can choose the lowest monthly amount you have earned in the last year, what you will have is the worst possible scenario.
  3. Determine what you owe
    Determining your recurring monthly debt payments should be your next step. This should be fairly simple to do, as long as you have stopped incurring additional debt in the short term. If you haven’t been able to break your dependency on credit cards, that’s fine, as budgeting will act as a first step to your next debt relief. To find out what your recurring monthly debt payments are, calculate the total amount owed on each debt account, as well as the minimum monthly payment. This includes auto loans, mortgages, credit card debt, student loans, and all other debts that your family pays off on a monthly basis. This will provide you with the first items on your budget and allow you to determine your net worth.
  4. Calculate your net worth
    Once you know how much money you have and how much you owe, you can easily determine your net worth. Simply subtract what you owe from what you have and you get a number. This number will tell you the value of your financial resources. For me, this number was revealing. When I built my first budget, I had a negative net worth. I suppose this is quite common in Mexico, especially for young people just starting out.
  5. Determine your average recurring monthly expenses
    This can be the difficult part for many people. The best way to determine your monthly expenses is to make a list of your household expenses for one month. Keep your receipts, utility bills and any other expenses that arise for a period of one month, and divide these bills into categories. Categories can be as general or specific as you want them to be. I keep my categories extremely general (automotive / household), while you may prefer specific detailed categories such as (car wash / electric bill). Either way, it works fine, as long as you determine an average amount of expenses for each category.
  6. Enter this information in a database
    Before, you used to make budgets on paper. Things have changed for the better for all the new budgets. Software programs like Microsoft Excel and online budgeting tools have made it much easier to take the results of your first steps and develop a highly adjustable and sustainable long-term budget. I use Microsoft Excel for my own personal budget, because it allows more flexibility than websites. However, many people trust online budgeting sites, and whichever path you choose, it will ultimately help you accumulate more wealth and help you stay out of financial trouble.
  7. Check the bottom line
    After entering all of the above information, you will discover the most important number in your budgeting process: the totals line. This number will tell you if you are overspending or less. Ideally, during this step you discover that you live within your means, and maybe even have a little more left this month than the month before. On the other hand, you can determine what adjustments to make to your monthly expenses in order to live within your means.
  8. Make the right adjustments
    If the bottom line of your budget shows that you are spending too much of your monthly income, you will reach the most difficult step: making cuts in your monthly expenses. There are many websites that will teach you to be smarter with your income, help you reduce your recurring monthly expenses, and set your financial limits for budget planning.
  9. Adjust categories based on reality
    Life is full of surprises. Food becomes more expensive, gas prices rise, and rent can go up when you least expect it. Every time you notice that inflation increases in your expense categories, you get an increase in work and you start to earn more money, or worse, you suffer a financial setback such as a salary reduction or a job loss, you must adjust your categorical expenses according to the realities of the world around you.
  10. Pay yourself first
    Depending on your budget, depending on your bottom line, you may want to add some additional items to your monthly expenses. These can be scattered monthly to a savings account, college savings plan, or other savings vehicle. Moving money into savings and treating it as a recurring expense will allow you to slowly build up your savings without feeling like you have to make these deposits of what is left at the end of the month.
  11. Track, monitor and be disciplined
    Keeping track of your budget takes about an hour a week. But this will save you a lot of time in the long run. Once you have a budget in place, you want to keep it under control. The discipline and associated knowledge that you are making good short-term and long-term financial decisions will bring you great comfort and carry you from check to check with a long-term result of your savings

How to take advantage of a recession to make money

Most people and businesses suffer the consequences of a recession, losing assets and money. Others are taking advantage of the recession to make money. As I always tell ourselves: this money has to go one way or the other. You don’t lose it and it doesn’t end up in the trash. The question here is then: Where does this money go?

The answer is logical and simple: the money you lose during the recession goes to the bank account of prepared people.

How to prepare for a recession?

1- Analyze the economic environment

First of all, you need to analyze the economic situation in which you exist. There are different levels to analyze:

  • The local economy
  • National economy
  • International economy
  • Shifts in your industry

Each part is important because it helps to anticipate when the market will “slow down” or decelerate, and in which parts companies will start to lose money, or at least profits due to a drop in the market. consumer consumption, or a lack of company-level demand for the service/product.

2- Prepare your finances

Start saving your money. If you are planning to buy a new car or a house, wait a bit. If your analysis is correct, you will need this saved money to invest in the opportunities that are about to open. Don’t spend it on products or services you absolutely don’t need.

To take advantage of the recession, you will need cash to invest when prices start to fall and banks cut interest rates.

Where to invest once the recession begins?

Investing depends on several factors: what knowledge do you have, in which industries, how much money you have to invest, what is your objective: short, medium, long term, how much risk are you willing to take.

1- Real Estate

When a recession hits, many people can no longer pay their loans or rent and have to get out quickly. It is in your interest. If someone is in a rush to sell their house, the price will drop from the pre-recession market level. You can take advantage of this to take out low interest loans and wait for the crisis to pass to resell it with an easy profit of 20% and beyond.

2- Stock market shares

Investing in the stock market seems silly to many. While many companies’ stock values ​​drop rapidly during an economic downturn, it’s possible to take advantage of the recession to invest in high-value stocks for “pennies on the dollar.” In other words, if the business is big enough, has good cash flow and a solid structure, and you know it can survive the crisis, chances are very strong that the value of the stock goes back beyond what it was worth before the recession when the markets stabilize again. For example, if you didn’t buy shares of Company X because they cost $130 a share, and they fell $83 during the recession, buy with a medium to long term goal (3 at 10 years), allows you to make a handsome profit when the stock price returns to 130 USD or rises even more. Also, in some well-established companies, you can count on dividends on purchased shares. It all depends on the type of business, but you can educate yourself before you invest your money, and you’ll receive money during the recession without having to wait for the stock’s value to rise.

3- Shorting

Another type of analysis that you can apply to your stock market investment strategy is to look for companies that are not going to be able to survive or are going to suffer severely from the crisis. In this case, instead of buying stocks with the strategy of selling them back once they go up to make a profit, you can do shorting, which in simple terms means that you are betting against the stock, and the lower the stock price falls, the more you get.

4- Invest in essential products

If you can take advantage of a source of income during a recession, it is in basic necessities. It’s about everything people keep buying, crisis or not. Water, food, medicines etc… people have to live, and some products are simply compulsory to buy, even in times of crisis. If you detect a recession in the coming months, or one that is just beginning (as happened in Mexico at the start of COVID), we recommend that you look for investment opportunities in basic necessities.

5- Think 3D: Deaths, Divorces, Defaults (of payment)

It has been proven that in times of recession, statistics on deaths, divorces and defaults increase. This means that in times of recession, a category of people is formed, who need to quickly get rid of their assets (real estate, luxury, fixed assets, etc.) because someone died in their family, they have to divide assets during a divorce and they need money to rebuild their homes, their lives and pay their lawyers, and also people who can no longer pay their credits (defaults) and then seek to get rid of goods and properties so as not to go into further debt. If you are an opportunist (in the positive sense of the word), this strategy can be very profitable in the short term since a recession/crisis lasts on average no more than a year and a half, which allows you to accumulate a portfolio cheap that you can resell for a lot more when the economy returns to normal. There are many strategies for getting out and profiting from a recession and making money. Economic winter doesn’t have to be winter for you. You can turn any problem into an opportunity if you have the right mindset and more specifically: ingenuity.