Happiness and financial security

What makes us happy? It's a question that has preoccupied people for centuries, from philosophers to economists, scientists to clergymen.

Researchers at the Earth Institute at Colombia University have sought to quantify and measure happiness in the world. The result of their research was the World Happiness Report, published in 2012. They took into account factors including wealth, political freedom, strong social networks, job security, and good mental and physical healthi. Their results found an interesting correlation between wealth and happiness.

A study conducted at Princeton University has found that a person's overall satisfaction with life is greatly influenced by their sense of financial security.

What makes us chipper?

Based on life evaluation scores on a scale from 0 to 10, the report found that people in wealthy countries tend to be happier than those in poor countriesi. The Northern European countries Denmark, Norway, Finland, and the Netherlands were found to be the happiest in the worldi. In contrast, countries in Sub-Saharan Africa -Togo, Benin, Central African Republic, and Sierra Leone- were found to be the least happyi.

But, of course, these results are representative of entire countries taking into account all factors of life, however within the higher scoring countries; happiness still varied at the individual level and was dependent on a large range of factors in relation to wealth. The research indicated that - more than just having a lot of money - a person's happiness comes down to job security, along with a stable family life and good mental healthi. It seems that it's not about having money, but it's about having financial stability.

Research in psychology backs this idea. A study conducted by Princeton University psychologist Talya Miron-Shatz found that participants who stressed over financial matters - making ends meet, paying off school fees, and managing retirement funds - were overall less satisfied with their livesii. A University of Wollongong study also found similar results: wealth brings financial security which in turn increases life satisfactioniii.

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Creating stability for your loved ones

Happiness is not all about money and having things. When it comes down to it, knowing our loved ones are content, healthy and safe is a major part of being happy. In the event of family tragedy, loved ones suffer not only emotionally, but the financial burden experienced can be crippling. Life insurance is one way to help relieve financial distress in the event of a permanent injury, critical illness or even death of a loved one. To find out more about how life insurance can help to provide or to get a quote, visit Allianz online today and you could be covered in minutes.

i The Earth Institute, 2012, First World Happiness Report Launched at the United Nations, Colombia University, http://www.earth.columbia.edu/articles/view/2960

ii MacPherson, K., 2009, Financial security, more than money alone, may be key to happiness, Princeton study says, http://www.princeton.edu/main/news/archive/S23/72/98Q34/index.xml

iii Howell, R.T., Kurai, M., Tam, W.Y.L., 2012, Money buys financial security and psychological need satisfaction: testing need theory in affluence, University of Wollongong, http://ro.uow.edu.au/cgi/viewcontent.cgi?article=3557&context=commpapers