spending money | Bigg Success

Money can’t buy happiness. We’ve heard it over and over.

Mostly from people who don’t have money!

Is it true? No, it’s not. For two reasons.

First, research has shown that when money buys basic needs which weren’t being met before, there is a huge spike in happiness.

Beyond that, however, spending money leads to only momentary increases in happiness. The happiness is gone before the newness wears off.

However, the second reason is more compelling.

Elizabeth Dunn is a social psychologist at the University of British Columbia. Her research focuses on why people inaccurately predict their future well-being.

For example, in one study, she asked people whether they would be happier spending $5 to $20 on themselves or on others. The majority said they would rather spend it on themselves.

She then gave a second group envelopes stuffed with either $5 or $20. Half were told to spend the money on themselves. The other half were instructed to buy a gift for someone or donate it.

The people who gave it away were happier than those who spent it on themselves!

She followed this study with two more – one that looked at what people did with a bonus and another that looked at giving as a percentage of income. . She found that happiness was driven more by the amount given than the amount received.

She said that “if [giving] becomes a way of living, then it could make a lasting difference.”

As we enjoy this “most wonderful time of the year,” this study serves as a reminder that the spirit of giving should be with us all year.

Money can buy happiness when you give it away.

Giving sends a signal to your brain. It says that you have more than enough. It creates a sense of abundance. And it leads to many happy returns. That’s BIGG success!

spending Here’s a concept that business owners often struggle to really understand: Every penny you spend is an investment.

We’re used to seeing investments show up on our Balance Sheet. We buy a new computer and we see it added there.

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When we spend money on advertising or office supplies, it shows up on our Income Statement rather than our Balance Sheet.

But we’re still spending money. It’s an investment for the purpose of increasing our sales.

The financial statement on which it shows up on is based on accounting rules. We have to understand that we are spending the money with the purpose of increasing sales.

Interdependence of business and personal finances

While we say business owners, this concept applies to our personal finances as well.

As a business owner, particularly a business owner who owns 100% of your firm, your business finances and personal finances are completely linked.

Not in a legal sense – you’ll want to talk with your attorney to select the right entity for your company – but in a philosophical sense.

Your business has to do well or it will affect your personal finances. We all get that.

What a lot of people forget is that their standard of living may affect their business. If you spend too much personally, you put more of a burden on your business to produce more income for you to take out of the business. It can really add to the pressure, particularly for a start-up business.

In our personal lives, every penny we spend should add to our happiness. If it doesn’t, it’s not a worthwhile expenditure.

Start from scratch

There’s a technique that helps you decide if the returns you’re getting are sufficient. It’s called zero-based budgeting.

For every line item on your Income Statement, you assume you don’t need to spend any money. Then you add to it for the outlays you determine will give you the return you desire.

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george I do this in my businesses every three years. Costs can creep in. You commit to this service or that program. It all adds up. Instead of doing it all every three years, you may pick a few line items every year for review. Just make sure you cycle through all of them every few years or so.

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marylynn Let’s take an example that applies to our businesses and our personal lives – our cell phone. I might ask myself: Do I need the package I currently have or could I cut back? Do I need unlimited texting?

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You’ll also consider alternatives. If you weren’t spending this amount of money on your cell phone, what might you spend it on? You might find you could increase sales faster or be a lot happier if you spent this money on another thing.

You might decide to increase your long-term happiness and invest this newfound money. That may make you happier now and then.

By justifying the expense all over again, away from the emotional point of purchase, you’ll spend your money on what you really want. You’ll get the returns you seek. That’s bigg success.

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