Greg McAweeney

Everyone wants to be happy. It has been the subject of books, films and in 2014 Pharrell Williams’ tune Happy went to number 1 in more than 30 countries from Slovakia to Spain, causing a wave of joy around the world. But one of the simple secrets to happiness, revealed today in new research, may come as a pleasant surprise to many people.

In one of the most detailed recent investigations into the link between happiness and money, the new research, released to mark the launch of the 2014 RaboDirect Financial Health Barometer (FHB) which surveyed 2,300 Australians aged 18-65, found that people who live within their means and are regular savers are happier, healthier and more optimistic than those whose spending is out of control.

But could it really be this simple? According to RaboDirect’s Group Executive Greg McAweeney, the results are convincing and also raise an interesting question about just how beneficial things such as ‘retail therapy’ and feel-good shopping to boost morale really are.

He explained, “Our research has once again shown a high correlation between financial control, savings habits and our success in the pursuit of happiness. So-called retail therapy is not necessarily bad in itself. However, the high we get from a trip to the shops is likely to be short lived if we are not living within our means. It seems that just having some money in the bank and knowing we can comfortably meet our outgoings makes us happier than actually flashing the cash.”

The RaboDirect FHB research also found that people with good financial habits may even live longer, with the benefits of living within one’s means and being a regular saver also having a profound effect on the way we view our health. People who report to be living within their means are considerably more likely than ‘out of control spenders’ to say they feel healthier than they did two years ago and that they don’t feel satisfied unless they exercise at least three or four times a week.

Mr McAweeney expanded on this. “This halo effect of good money habits extends well beyond happiness and, as extreme as it may sound, this may actually add years to your life. Regular savers are almost twice as likely to say they feel healthier than they did two years ago whilst those who live within their means are more likely to watch what they eat. This research certainly builds a compelling case for people to seize control of their financial habits and we have three years of data to prove that this is a very real phenomenon.

“There are simple steps that each of us can take to make more of our money. You don’t need to be rich to enjoy the health and happiness benefits that being in control of your finances can deliver. In fact, it isn’t about what you have, it’s what you do with it that matters. Financial control is within the grasp of most people – it’s about taking simple steps such as paying down their biggest debt first, starting a simple budget, and importantly – to spend less than you earn and tuck away the difference for a rainy day.

“You should also take a look at the products you are using to house your savings and make sure they are working hard for you – you shouldn’t have to pay fees on a true savings account and you should consider using accounts where you can restrict yourself from accessing the money immediately as it will act as a natural deterrent for over spending on a whim.”

So who are Australia’s happiest people?

The RaboDirect research also uncovered who’s doing it right, analysing the happiness levels across different demographic groups. The happiest Aussies have been found to be Gen Y men, living in NSW in homes where the household income is between $100,000 and $150,000. These happy chappies are most likely to report that they live within their means and are regular savers.

Mr McAweeney concluded by saying, “Clearly the more we earn the easier it is to live within our means but it is interesting to see that people with household earnings of between $100,000 and $150,000 claim to be happier than those earning in excess of $150,000. So there may be a glass ceiling on the ability of money to bring happiness. Our research suggests that the optimal household income for happiness is $125,000. But possibly no more.”

Table 1: The link between regular savings and well being

Table 2: Happiness by demographic groups

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Greg McAweeney

Everyone wants to be happy. It has been the subject of books, films and in 2014 Pharrell Williams’ tune Happy went to number 1 in more than 30 countries from Slovakia to Spain, causing a wave of joy around the world. But one of the simple secrets to happiness, revealed today in new research, may come as a pleasant surprise to many people.

In one of the most detailed recent investigations into the link between happiness and money, the new research, released to mark the launch of the 2014 RaboDirect Financial Health Barometer (FHB) which surveyed 2,300 Australians aged 18-65, found that people who live within their means and are regular savers are happier, healthier and more optimistic than those whose spending is out of control.

But could it really be this simple? According to RaboDirect’s Group Executive Greg McAweeney, the results are convincing and also raise an interesting question about just how beneficial things such as ‘retail therapy’ and feel-good shopping to boost morale really are.

He explained, “Our research has once again shown a high correlation between financial control, savings habits and our success in the pursuit of happiness. So-called retail therapy is not necessarily bad in itself. However, the high we get from a trip to the shops is likely to be short lived if we are not living within our means. It seems that just having some money in the bank and knowing we can comfortably meet our outgoings makes us happier than actually flashing the cash.”

The RaboDirect FHB research also found that people with good financial habits may even live longer, with the benefits of living within one’s means and being a regular saver also having a profound effect on the way we view our health. People who report to be living within their means are considerably more likely than ‘out of control spenders’ to say they feel healthier than they did two years ago and that they don’t feel satisfied unless they exercise at least three or four times a week.

Mr McAweeney expanded on this. “This halo effect of good money habits extends well beyond happiness and, as extreme as it may sound, this may actually add years to your life. Regular savers are almost twice as likely to say they feel healthier than they did two years ago whilst those who live within their means are more likely to watch what they eat. This research certainly builds a compelling case for people to seize control of their financial habits and we have three years of data to prove that this is a very real phenomenon.

“There are simple steps that each of us can take to make more of our money. You don’t need to be rich to enjoy the health and happiness benefits that being in control of your finances can deliver. In fact, it isn’t about what you have, it’s what you do with it that matters. Financial control is within the grasp of most people – it’s about taking simple steps such as paying down their biggest debt first, starting a simple budget, and importantly – to spend less than you earn and tuck away the difference for a rainy day.

“You should also take a look at the products you are using to house your savings and make sure they are working hard for you – you shouldn’t have to pay fees on a true savings account and you should consider using accounts where you can restrict yourself from accessing the money immediately as it will act as a natural deterrent for over spending on a whim.”

So who are Australia’s happiest people?

The RaboDirect research also uncovered who’s doing it right, analysing the happiness levels across different demographic groups. The happiest Aussies have been found to be Gen Y men, living in NSW in homes where the household income is between $100,000 and $150,000. These happy chappies are most likely to report that they live within their means and are regular savers.

Mr McAweeney concluded by saying, “Clearly the more we earn the easier it is to live within our means but it is interesting to see that people with household earnings of between $100,000 and $150,000 claim to be happier than those earning in excess of $150,000. So there may be a glass ceiling on the ability of money to bring happiness. Our research suggests that the optimal household income for happiness is $125,000. But possibly no more.”

Table 1: The link between regular savings and well being

Table 2: Happiness by demographic groups

The post Simple secret to eternal happiness revealed appeared first on AdviserVoice.

• Australia’s record economic expansion is now well into the 20th year. The Australian economy grew by 0.7 per cent in the December quarter, after lifting by a downwardly revised 0.1 per cent in the September quarer (originally reported as growth of 0.2 per cent). Annual economic growth held steady at 2.7 per cent.
• For the calendar year 2010 the economy grew 2.6 per cent in 2010, below 15-year average of 3.25 per cent.
• The biggest contribution to growth came from the change in inventories (+0.8pp), followed by household consumption and government investment (both +0.2pp).
• Eight of the 19 industry sectors contracted in the December quarter. The strongest contributions to growth came from Professional, scientific and technical services, Administrative and support services, and Arts and recreation services.
• The data is entirely consistent with surveyed evidence and what we are hearing from businesses across the country. The Reserve Bank has previously indicated that it is comfortable with current interest rate settings and there is nothing in today’s result that is likely to see a shift from that view.
• A more accurate description of the performance of States and Territory economies is state final demand plus net exports. The Northern Territory (up 5.4 per cent), had the fastest growth in the December quarter, followed by South Australia (up 3.0 per cent),and Western Australia (up 1.6 per cent). Growth was weakest in Queensland (down 1.5 per cent).

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