Comments: Does Money Make You Happy?

A couple weeks ago, a reader named Steve emailed me and suggested I start/expand upon a discussion about people's relationships with money (how they feel about it, how they value it, how they decide to use it, etc.). I suggested that he write a piece on the topic and I said I would post it.

Since then, I wrote the post "Does Money Make You Happy?". I think Steve either was working on this piece or just wanted to comment on the post with his thoughts, but either way, he left this well-thought-out comment:

Recent FMF posts have raised some important issues about people’s relationship with money. We want to have it, but as recent national indicators suggest, we also want to distance ourselves from it - personal saving is at an all-time low. Why do many people seem to have difficulty saving money? And why is it that not owning a pet/skipping dessert/not buying a pool membership, and so on can seem somewhat dissatisfying? To understand the answers to these questions, it might help to consider what money and products symbolize to us. Marketing experts are effective not because they simply offer a product to buy, but because they offer something that the product represents. Freedom, independence, security, power, status, pleasure – each of these themes (and others) can easily be found in the marketing of nearly every product we have an opportunity to buy.

That means that not spending money on some products may seem like a big sacrifice (in fact, that’s often what marketers hope we will feel). By not owning a pet, we might feel as if we’re giving up the potential for lots of attention and unconditional love in our lives. By skipping dessert we might feel as if we’re denying ourselves our right to pleasurable experiences. By not buying that car we want, we might feel as if we’re sacrificing a degree of status, security, independence, and pleasure. Of course, we are not actually giving any of these values up; it just feels that way, which can sometimes be as hard as the real thing.

One trick to saving money while simultaneously increasing our general satisfaction with life then, is to identify what it is that certain products mean to us, and then identify other (less expensive) ways of obtaining those things. Is a pet the only way to obtain a sense of unconditional love in our lives? Is that $5 piece of double chocolate fudge cake the only thing that will make us happy at that moment? Is buying a particular car the only way to obtain a sense of status, independence, security, or pleasure in your life? I’m guessing that the answer to most of these questions most of the time is no. So I would add to Laura Rowley's conclusion - by identifying sources of meaning in our lives outside of purchasing stuff, we can simultaneously increase our feelings of happiness AND our savings account balances.

These thoughts resonated with another reader who was inspired by this sort of thinking:

Well put Steve. As a first generation Indian-American I have always realized, from day 1 I arrived in America, that it's much more materialistic society than it should be. It all boils down to culture and the stereotyping that goes with it. No offense, but we really, really need to slow down with consuming what we cannot afford. It's like everybody is warped in time that there's no escape from it lest it hurts the status conscience - recent cover story in Psychology Today has a nice analysis on this trend. I do not know what can be done to make people really understand.

Now, do you want to continue the conversation? What do you think?

Comments

[joseph]

money can make a person "happy" as well as "misirable"!
but one thing is true.. it sure make life alot easer with it!!!

[Reb]

Money is like health. Abundance of it doesn't guarantee happiness, but lack of it is sure to bring misery.

For me, I like when my net worth increases, not because I want to buy an SUV, or an expensive house, or armani suits, I want it to increase because it means I can retire earlier. By retire I mean retire from my 9-5 job, and spend that time thinking of a business, or investing ideas, or writing the book I always wanted. It doesn't have anything to do with material possessions, but freedom to do what I want, not what my boss wants.

[Super Saver]

Your post reminded me of an article titled "Money on the Brain." http://finance.yahoo.com/columnist/article/moneyhappy/8708

The article shares that the brain is delighted by novel experiences. Money provides the means to get novel experiences, such as buying new things. However, the brain is more delighted by the thought of the novel item than actually owning the item. Hence, the occurrence of buyer's remorse and the need for more new purchases.

By the way, "Money on the Brain" was also written by Laura Rowley, the same auther that sparked your original post. Her solution, spend money on experiences and have a overarching life goal of which money is a part.