We all have at some point wondered whether money can buy happiness? Those who say yes, are judged. World Happiness Day is celebrated on 20 March. And on this day, Raj Raghunathan, professor at University of Texas, and author of the book If You're So Smart, Why Aren't You Happy?, tells us how one manages money can bring more happiness than the money itself. Money can make you happy to a certain point: According to Raghunathan, money can bring happiness, "but only up to a certain point (around $80,000 per household per year in the US; considerably less in India)." After that, it doesn't buy you much happiness. Money management is more important: Money management is particularly important if you don't have enough to begin with, he said. One of the biggest sources of stress in the world is lack of sufficient financial resources, and in many cases, the reason for lack of financial resources is poor money management, rather than lack of sufficient funds.

A person in debt, particularly if she has had this debt for a long time and is struggling to pay it off, has a "scarcity mindset". "Scarcity mindset promotes a set of thought processes and behaviours, including myopia and selfcentredness, that are not conducive to being happy," the professor said.

You can calculate the amount of money needed to lead a good life: It is difficult to zero in the exact amount of money to be happy since one size doesn't fit all. This depends on many factors, including spending habits, desires, health, and obligations. "But that said, the amount of money one needs to lead a "good" life can-and should-be calculated. As a very general ballpark, I would say that, on an average, it would be in the $100,000 range for a household (two adults and two children) in the US and about a third of that in India," said Raghunathan. Three ways to manage money and be happy: There are strategies you can use to manage money and bring happiness in your life. "I would begin by keeping track of expenses over a longish period of time (certainly at least a year so that all the 'one-time' expenses such as taxes are included). That will give you a good idea of the main categories of expenses and how much you spend on each. Then, I would estimate how much money I need to lead a lifestyle that I want in the future. (This desired lifestyle could be more expensive than what someone currently has.) Finally, I would calculate how much I need to save every month to have a big enough nest egg after retirement. These three exercises will give you a good idea of: 1) which expenses to cut, and 2) how much to save every month," said the professor. Relationships are more important than money: Money is important; relationships even more so. "I would recommend making sure that you don't sacrifice relationships for the sake of money- that's a slippery slope...," said Raghunathan. Another priority should be health-physical and mental. Finally, maintain a gratitude journal, where you make a note of "3 good things" that happened each day. "These need not be (and won't be) 'big' like finding a life-partner .... Even keeping a note of three small good things-like 'a stranger smiled at me today' or 'I found Rs20 on the road'- will, over time, make you feel happier."

In arrangement with HT Syndication | MINT

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