If a genie came out of the bottle and promised you $10,000,000 or the guarantee you’d be happy which would you take? If you took the happy guarantee then maybe you’d end up homeless, but you’d still be happy! I find myself going back and forth sort of believing that you need the money in order to be happy. Could I be happy while being homeless? It a variation on the age old statement of “Money can’t buy happiness.” But can it?
Psychologists, economists and other have tried to answer question more quantitatively.
In an article from the University of Nebraska’s department of psychology they point out that to a certain degree money CAN buy happiness. It can buy a house in a safer neighborhood, better healthcare and more leisure time.
In another article from Time Magazine they found that going from an annual income of $20,000 to $50,000 made someone twice as likely to be happy. But going from $50,000 to $90,000 only had a slight adjustment to someone’s happiness.
In a third article from Her Money they went one step further and said:
Spending money can, in fact, increase your happiness — if it’s spent in a way that works with your personality. In other words, consider who you are when you make a purchase, and that could make all the difference.
It’s important to note that we don’t really believe money can buy happiness but the things it can buy can make us happy. While the altruistic answer is to say that money can’t buy happiness, we live in a consumer driven world and at some level do believe that things can make us happy.
Our belief that things will make us happy is easy to understand. If clothes keep us warm and make us happy then wouldn’t nice clothes that look good make us more happy? If a place to live makes us happy then wouldn’t a bigger house make us happier?
In reality people don’t always know what will make them happy. Let me give you an example. When I was a freshman in high school I realized I was going to be home alone one day. Mom and dad were out and my four younger siblings weren’t going to be home either. I decided this would be “the day of Jared” and I would do whatever I wanted.
I slept in, when I woke up I skipped the shower and started watching TV. When I got hungry for breakfast I started eating cookies. A few hours into the day and I was lying in my PJs, watching TV and eating cookies. To my surprise I was miserable.
When my dad came home for lunch I ran upstairs hoping he would give me a job or chore or something for me to do. I was very surprised at this thought/desire.
In the previously referenced article from Time they ask, “Why is it the more money you have the more things you want to buy?” Then they note that the more someone makes they more they want. The more they have, the less effective things are at making someone happy.
When someone says, “If I was only making a little bit more money I’d be happy.” But that isn’t true. When they make more money their wants increase as well.
The concept of the Hedonic Treadmill explains the temporary pleasure we get from making a purchase. This theory states that regardless of what happens to people, their level of happiness will eventually return to their base level.
In an article by Positive Psychology they reference a study of two groups of people. One group was comprised of people who had won a significant sum in a lottery. The other was a group of accident victims who were now paralyzed. Of course, the lottery winners and paralysis victims experience initial reaction of happiness and sadness, respectively.
The really interesting part is that the effects weren’t long lasting:
People in both groups shortly reverted to their previous levels of happiness.
Understanding what makes us happy can help us financially. I’m not saying not to buy the new iPhone or home or car. But if we go into the purchase knowing it will only make us happy temporarily, we’ll make purchases that are authentically ourselves and for the right reason. We won’t be chasing something that isn’t attainable through a purchased good.
