Does Money Make You Happy?

Here's an article from Yahoo that discusses whether or not money makes people happy. We'll start with what science says:

Scientists have found that while a certain amount of money does indeed make us happy, once basic needs are met, happiness doesn't continue to rise in direct proportion to income. For instance, surveys of lottery winners found they are not much happier than the average person -- and actually took less pleasure in routine events, like a friend telling a joke.

Ok, so more and more money doesn't make us more and more happy, right? It's actually worse than that:

But that's not all. Researchers Tim Kasser of Knox College and Dr. Richard Ryan of the University of Rochester have found that people who make money a top goal in life are at greater risk for depression, anxiety, behavioral and relationship problems, and score lower on indicators testing for self-actualization and vitality (or feeling alive and vigorous). The results were consistent across different countries, income levels, and age groups.

Given these results, Yahoo asks the same question you're probably asking right now:

So if scientists say chasing more money and more stuff can actually be bad for you, why do we keep climbing on the hedonic treadmill?

Answer: No one knows. But here's a thought:

Here's one compelling theory: People are bad at predicting what will make them happy.

This is getting a bit too much into psycho-babble for me, so let's cut to the chase:

The bottom line: The bigger the trade-up in lifestyle, the bigger the monthly nut -- and the harder we have to work to achieve material goals. Since there are only 24 hours in a day, we end up sacrificing other aspects of life that actually do create lasting happiness (at least according to scientists): Spending time with family and friends, exercising, or volunteering.

Interesting information. What's your take on it?

Comments

[Steve]

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.

[Futuralogic]

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 comsuming 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.

[matt]

i am doing a report on happiness and i was wondering if money really makes you that happy and it would be lots of help if you could help out thank you very much.

[FMF]

Matt --

Check out these posts:

http://www.freemoneyfinance.com/2006/09/is_there_a_rela.html

http://www.freemoneyfinance.com/2006/08/will_earning_mo.html

http://www.freemoneyfinance.com/2006/02/money_happiness.html

http://www.freemoneyfinance.com/2006/02/money_doesnt_ma.html

http://www.freemoneyfinance.com/2006/01/how_to_be_happi.html

[paul le boustouler]

yes i think money does bring u happyness in the long run every1 is happier when they are finanical ballenced as the saying goes " who ever said money does bring them happyness cant be spending it properly" lol

[paul le boustouler]

yes i think money does bring u happyness in the long run every1 is happier when they are finanical ballenced as the saying goes " who ever said money does bring them happyness cant be spending it properly" lol

[Jordyn]

yes i agree that having money as your main goal can make you more un happy then you already are but what about the simple things in life that cost money? For example i could buy myself a puppy and the puppy can make me happier. so money may not make people happier directly but indirectly if you spend it right.

[Maria]

Money isn't everything. Money is important. But it is not everything. I know that already. And I've never been rich.

My partner thinks money is everything. I don't. I think it's important...we go to work every day to earn it...we can't survive, without it. But I don't think it is everything. However, he is in Amway now. His values have changed. He talks about nothing else. I say nothing. I'm not the one to crush his dreams, or anyone's dreams! But it is definitely affecting our relationship. He secretly resents me - for not being in the business, with him. I miss the conversations we used to have...before Amway. We talked about anything & everything. But now I hear nothing else - but Amway this & Amway that. He sometimes mocks me for choosing to "work for a boss". I don't like that. He reads the book Rich Dad Poor Dad every day. It is like a Bible to him. What's your opinion re the Amway business? I know it works for people. There are big time achievers for sure. I'm not doubting it works, for some.

[margret mphwiyo]

Yes, money makes people happy because when one have money they are free to do anything to the point of buying happiness.For example, one can give bribes to lose acase in court, hire expensive and competetive lawyers. Therefore one is buying happiness and can be happy.Money can make people happy.

[margret mphwiyo]

Yes, money makes people happy because when one have money they are free to do anything to the point of buying happiness.For example, one can give bribes to win a case in court, hire expensive and competetive lawyer, therefore one is buying happiness and can be happy.Money can make people happy.

[gp]

As we live in a materialistic society, where everything is about personal image and being above others, money does not necessarilly make us intrinsically happy. We have been bought up in a community which beleives that 'having a top of the range good is best because we feel a sense of dominance, a sense of being envied by others. But this is a paradox. Think about it, does having a ferari really maked u liked more by others?. NO. The majority will find u snobbish, a 'show off'. And 'no one likes a showff

[K.U STAR]

money cnt buy luv...u will never find a family with money...yes money cn gt us lts if stuff but it cnt gt the mst important things!

[Kd]

I dont know about all of you but i like money its makes me happy. If money allows me to buy food, clothing etc, go out, fill fuel in my car to go on vacations and mastly pay for my bills then yes money does make a person happy. People who say money doesnt make you happy are idiots!
Money is the thing that allows you to do the things you want and if doing the things you want make you happy then money makes you happy

[leggings]

It comes down to the basic instinct, that men are to provide and women are to be desirable. With more money, men can provide better for women and their family. Women can enhance and improve on their attractiveness. But it seems within the western society of mass consumerism, people are pushing the boundaries of what is "being able to provide" and "attractiveness" Is having 5 cars providing or just excess? I believe that money will make you happy depending on the person and the circumstance. for example a person who marrys for money may be happy and rich in material possessions but never happy within themselves.