Texas Tech University

Liz Weston: Saving money makes you happier – here's proof

The Seattle Times

October 23, 2017

The Seattle Times - The argument over whether you should invest or pay off debt usually focuses on financial numbers, such as rates of return and interest charges. Maybe happiness should be part of the equation as well.

Studies in several countries, including the U.S., Norway, Ireland and Spain, have found high levels of financial satisfaction among elderly people. Happiness with our money situation tends to rise with age, even though our income peaks in midlife and then generally declines.

Fair enough. But then two Texas researchers looked into which of those two actions - paying down debt or building up investments - was the bigger contributor. Increasing assets was the hands-down winner.

People with more debt were less satisfied, but lowering their debt loads didn't seem to make them much happier, says Russell James, a certified financial planner and director of graduate studies in charitable planning at Texas Tech University in Lubbock, Texas. James conducted the study with Scott Garrett, then a doctoral candidate and now a certified financial planner at Ronald Blue Trust in Houston. The pair tracked 839 adults age 50 and older for four years to measure the changes.

Read the story here.