Boosting happiness with the Swedish art of ‘just the right amount’
Financial security rather than possessions may be the real route to happiness.
Philosophers who urge that ‘money can’t buy happiness’ are only partially right. Money can buy quite a lot of happiness – but perhaps not in the way it first appears.
That’s the finding of a new report from Barclays and economics consultancy Cebr – ‘Living Lagom – challenging perceptions of wealth’ [PDF, 1.15MB]. The report looks at how Brits can boost their happiness and wellbeing by adopting the Swedish art of ‘lagom’, which means ‘just the right amount’.
Extra security beats extra income
The key, the report says, is not earning more money, but creating more financial security. The research showed that boosting the amount of money saved each month had a far bigger impact on life-satisfaction scores than an increase in income. In fact, extra savings have a greater impact than being happily married.
For those who have already accumulated significant wealth, the report’s findings suggest that financial freedom is likely to be just as rewarding a goal as striving to earn more money. In other words, making the wealth you already have work harder may be as good an option for your ‘happiness quotient’ as a pay rise.
Wealth is relative
The report also found that perceptions of wealth are skewed, with vast discrepancies between the level of wealth and how wealthy people felt. Some felt wealthy with relatively small amounts, while for others, wealth was always out of reach. On average, Brits believe you need over £1 million to be wealthy, though this masks significant age and regional variations.
Unsurprisingly, the happiest people were those who could be content with what they had. Individuals who felt they were living comfortably regardless of income were 11% more likely to be mostly or completely satisfied with their lot.
The findings chime with a growing movement against the accumulation of more possessions. Arguably, the trend started in 2017, when Ikea’s head of sustainability said that the world may have reached ‘peak stuff’.
Speaking at a Guardian conference, Steve Howard said “We talk about peak oil. I’d say we’ve hit peak red meat, peak sugar, peak stuff … peak home furnishings.”
Subsequent research by Goldman Sachs identified two factors driving this phenomenon. First is the Millennial preference for access over ownership – people are more willing to share goods and care less about exclusive access. Second is a growing desire for enriching experiences over untrammelled consumption.
A means to an end
In a financial context, the report suggests that achieving financial security through savings and investments is likely to bring more happiness than creating new expenditure – a bigger house, a bigger car, a home abroad and so on.
It also suggests that wealth should be seen as relative to lifestyle and your goals, rather than as an end in itself. That means wealth is a concept, not a number – and is in the eye of the beholder.
At Barclays, this is how we’ve always seen it. Good financial planning looks at your goals and ambitions and works from there, rather than starting with a number and working back. Money is a means to an end, rather than the end in itself.
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