Can money buy happiness?

Many have tried, but the jury is still out. Debt always causes misery, which might be considered as the opposite of happiness. I find it interesting how many people prefer misery in debt rather than the relief of not being in debt.

Academics have discovered an amount of income that achieves maximum happiness for everybody. This is great news for most people. But, if like me, you think of debt as a necessity for life then no amount achieves happiness.

Debt limits my options, which can make me sort of comfortable. Being away from debt gives me a degree of happiness but causes me distress with the amount of choices I need to make. I then have no excuses as to how I can lead my life as I have the freedom to do little things that are totally about me. I can choose a holiday, but who to go with? I can choose a home, but which one? Restaurants, clothes and lifestyle too? To start with this can be overwhelming and the temptation to go back into debt and stress about unpaid bills can seem a lot easier.

A high proportion of people I have helped to get out of debt, go back into debt as they feel having money did not bring them happiness. For this reason, among others, I always recommend coming out of debt very slowly. Learn to live with the debt and an increase of living standards and choices very slowly.

Acclimatising to being out of debt seems an odd thing and I have not come across many people talking about it. In my experience, both individually and with others, it's a vital component of being debt free and ultimately happy. It's a bit like being shot through the sound barrier. First, we put a lot of energy into the thrust of pushing forward, then there is a huge bang as we get out of debt and suddenly we have the whole sky to explore. This can be very frightening and overwhelming without good basic training.

Then we fall to the ground and go back into debt, often deeper into debt, so that we never have to deal with that fear again. We spread fear and danger at every point. And if we sort ourselves out, we receive a lot of anger and aggression from those who just see what we have as scary and plain wrong.

I ask clients: what is the amount that would make you happy? They have never even entertained the idea and so shut down with a blank furious stare. If lots of stuff makes you happy, then maybe lots of money will make you happy, but being out of debt for the first time with a little bit of money, might make you really scared. So we need to prepare for it.