ANN/THE STAR – Is happiness purchasable with money? As per esteemed psychologist Professor Daniel Gilbert from Harvard University, the answer is affirmative, but contingent upon knowing the appropriate method of expenditure. Contrary to popular belief, longitudinal research indicates that money indeed correlates with happiness, particularly when utilised in a manner conducive to individual welfare. Money affords us access to valued necessities, comforts, enjoyable experiences, and the capacity to support others.
When you have enough money, you are better able to be financially generous. Giving is considered as double happiness, where the receiver can reflect on gratitude, and the giver benefits from the act of generosity.
You may also spend money on engaging in experiences that mean a lot to you. For example, if you are given two options; to either spend a fixed given amount of money on materials or a pleasant experience, which would you choose?
Research shows that the majority of people would choose pleasant experience, such as attending a concert over buying paraphernalia of their favourite performers. Research also shows that the happiness from buying items does not last as long as buying pleasant experiences because memories of experiences last longer.
We also know from mental health studies that financial health is a strong determinant of mental health and sense of subjective well-being. This is because the top two factors for psychological distress that are seen in people who are suicidal are relationship problems and financial crises.
So, apart from having healthy relationships with family and friends, financial stability is also a significant buffer against psychological problems.
MONEY AND HEALTH ISSUES
Research data shows that economic hardships and perceived low efficacy in managing money are associated with various health issues including mental health. Poor financial literacy, or the inability to feel competent in managing financial security is also associated with various noncommunicable diseases such as heart diseases and chronic pain. People have been found to also experience trauma more easily as a result of poor financial health.
Basically, financial stress contributes to poor health, and financial fitness contributes to good health.
This is confirmed by a 2020 study conducted by Drexel University researcher Emily Brown Weida and her colleagues, which suggested that it is not how much money you have that contributes to a sense of well-being but how competent you are in earning and managing money.
As such, these researchers say financial health is a significant part of overall health of a family, subsequently calling for better literacy about managing money as part of public health initiatives.
That said, it is important for parents to teach children about the value of money, as well as the skills to earn, save and invest towards financial independence and stability as early as possible.
SHOCKING REALITY
Like any form of healthy habits such as regular exercise, adequate sleep and balanced nutrition, skill acquisition and practice should start as early as the child can learn. Financial health is no different. You don’t want to leave it too late.
So when is a good time to teach children about money? I would suggest as soon as they can identify differences between symbols.
When they are two or three, you may introduce them to coins and banknotes to tell them apart.
Most banknotes are in different colours according to value, and coins are of different sizes. This makes introducing them to toddlers a bit easier.
Once children are familiar with the currency, you may start exchanging play money for items they want in a play setting. They may not understand the values yet but they can get used to the function of money.
Once they are old enough to count basic numbers, children can be guided to buy simple items when you go to the shops or supermarket. The training goes on until they know how to independently buy things with money.
THE VALUE OF MONEY
However, knowing how to buy things does not mean that children are financially literate. How do we teach financial literacy to children?
Firstly, they need to understand the value of money and the behaviours that come with earning money and saving it.
Monitoring money and being skilful about anticipating its future use, as well as prioritising needs over wants are all important skills to be developed gradually. Learning how to delay gratification is one part of training that is key to reducing likelihood of impulsive spending.
It is useful to teach children about consequences of their actions around money.
As they grow older, it will be helpful for them to learn how to be independent with money and investment before they become adults who are accountable for their own decisions about finances.
It is very important that the whole family understands that money has a significant influence over their overall well-being.
They must also know why it’s important to be financially fit.
To that end, I think financial literacy is a public health issue and it is the society’s collective responsibility to teach children about spending and saving skills so when these kids grow up, they are equipped with the ability to manage their finances and thrive, instead of being bogged down by money issues. – Dr Alvin Ng Lai Oon
