I ran into the store the other day to grab some propane for camping … sadly, they were all sold out.
BUT … on the way out of the store I noticed 3 shiny new pennies on the ground! Woohoo! I love finding free money!! It’s not every day that you leave the store with more money than what you walked in with.
When I got back to the car, my wife was wondering why I had no propane, just a big dumb smile on my face…
“Babe! They were out of propane, but I found some free money on the ground!”
Wife: “Cool! How much?”
“Three shiny new pennies! Look, they are beautiful!”
Wife: “3 cents? You’re excited about finding 3 cents on the ground? You’re acting as if you found a $20 bill or something”
Hmmm… She’s right. 🤔 That’s interesting… There’s a huge difference between $0.03 and $20. In fact it’s a 66,000% difference! But, my reaction and excitement is almost the same if I found 3 cents or $20. (Ok, maybe I’d have been slightly happier to find $20 on the ground, but not 66,000% happier).
And this all got me thinking about how money and happiness isn’t matched on a 1:1 scale. Humans tend to think linearly.
It’s easy to think that…
- If a car is 2x more expensive, it will bring us 2x more happiness.
- If we had a 5 bedroom house, it would bring us 5x more happiness than a 1 bedroom house.
- If we make $1M per year, we will be 10x happier than making $100k.
- If we wear brand new clothes, we will have brand new experiences.
- Etc, etc, etc.
But the reality is, there’s a point of diminishing returns when it comes to dollars and happiness. And it usually comes WAY sooner than most people think.
It’s easy to focus on the money side of things in life. But at the end of the day, happiness is really what we’re all shooting for, right? So shouldn’t we focus more on the happiness side of things when we earn money, spend it, or randomly find coins on the ground?
My happiness tipping points
Took me a while to find my happiness points for different things in life (and maybe it will keep changing as I grow older?). But, I think recognizing where my point of diminishing returns is has played a huge role in wealth building and avoiding unnecessary spending.
I’ve learned that…
- Driving my 2010 Prius (worth about $6k) gives me just as much happiness as driving my friend’s new Tesla (worth probably $50k)
- Surfing on my 15 year old surfboard gives me just as much happiness as surfing a brand new board.
- Drinking a $2 craft beer in my backyard feels just as good as spending $8 for a beer at the pub.
- I’m just as happy buying fruit and veggies at the 99c store as I am shopping at expensive places like Whole Foods. (Yes, the 99c stores in my city sell fresh produce, even organics.)
- My iPhone 7 that I got for $100 does the EXACT SAME stuff as the new iPhone XVII (or whatever number they are up to these days.)
- The free haircuts that my mother-in-law gives me have the exact same happiness effect on my life as $60 fancy salon cuts do. (Well, there was that one time where she accidentally shaved a bald spot on the side of my head, but that was an accident, (I think!) 🤣)
Of course this doesn’t mean that I never do expensive things… Spending money is sometimes fun. But it’s just not a habit for me to overspend, especially knowing there is very little extra happiness to gain in doing so.
Anyway, just something to keep in mind as you’re going about designing your ideal life. Sometimes the cheaper/free stuff can give you just as much happiness —> while also increasing your $ savings and progressing your path to future financial independence.
And when you see those pennies on the ground, pick ‘em up and rejoice! All free money is good money!