Does Money Bring Happiness?

8:13:00 AM

It is an eternal question: can money buy happiness? Four years back from today, someone pinned this question in my mind, money can or can't buy happiness? Since then I was really thoughtful, and perhaps this is because I looked for being happy instead of earning money. 

In recent years, new studies have given us a greater understanding of the relationship between what we earn and how we feel. Economists have studied the link between income and happiness in countries, while psychologists have wondered why money moves us in some way.

Does Money Bring Happiness?
The results may seem obvious at first glance: yes, people with higher incomes are generally happier than those struggling to survive.

However, when analyzing the findings in detail, they are more surprising and much more useful.

In short, recent research indicates that wealth alone offers no guarantee of a good life. Much more important than high income is how it is spent. For example, giving money generates much more happiness in people than to waste it on themselves. And when they spend it, people are much happier when they use it for experiences such as travel rather than material goods.
Money is still not everything in life but people who earn more are happier.
Then what the latest research say about how people can use their money smarter and maximize their happiness.

Experiences are worth more than you think

Numerous studies in the last 10 years have shown that life experiences give us a more lasting pleasure than material things, and yet people prioritize tangible goods.

Ryan Howell, an associate professor of psychology at San Francisco State University, set out to solve this puzzle. In a study published this year, he found that people think material purchases offer better value because experiences are ephemeral and goods last longer. Therefore, while they occasionally spend on big holidays or concert tickets, when they are more careful with the money they stay with the material goods. Howell, however, found that when people remembered the purchases he had made, he realized that experiences provided more happiness and a more lasting value.

Thomas Gilovich, a professor of psychology at Cornell University, has come to similar conclusions. "People often do a rational calculation: I have a limited amount of money, and I can go there, or I can have this," he explains. "If I go there, it will be great, but it will end soon. If I buy this thing, at least I always will. Objectively that is true, but not psychologically. We adapt to our material goods. "

This process of "hedonic adaptation" is what hinders both the purchase of happiness through material things. Experiences, on the other hand, often meet our underlying needs, Gilovich points out.

Many times, experiences are shared with other people, which gives us a greater sense of connection and form a larger part of our sense of identity. Crucial is that we do not usually compare our experiences with those of other people, as we do with material things, he adds. Also, people get more pleasure in waiting for skills than buying stuff, which seems to cause impatience.
If money does not bring you happiness, then why are you running behind wealth?

Do not suit what you buy

One of the main reasons why having more things does not always make us happier is that we adapt to them.

"Humans are exceptionally good at getting used to changes in their lives, especially positive changes," says Sonja Lyubomirsky, a professor of psychology at the University of California at Riverside. "If their income increases, it gives them a stimulus, but then their aspirations also increase ... Trying to prevent that or slow it down is a big challenge."

One method that can work, he says, is to maintain a sense of appreciation and gratitude for what one has, since the process of adaptation comes from taking what you own for granted. Variety, novelty, or surprise can also help you enjoy possessions more. "When things do not change, that's when you adapt to them," he says. Try to share your objects with other people and open your doors to new experiences, he recommends.

Try to give it away

The paradox of money is that while earning more tends to improve your well-being, it makes us happier to give it away than to spend it ourselves.

That was the finding of a series of studies by Elizabeth Dunn, an associate professor of psychology at the University of British Columbia and author of the book Happy Money.

He started giving money to students on campus, telling them to spend it themselves and others who bought things for someone else. The latter were much happier.

Dunn has repeated the experiment in other countries and also expanded the study to assess whether people were still more comfortable by giving away their own money. He found that in countries as diverse as Canada, South Africa, and Uganda, giving money consistently produced more happiness, even when people were relatively poor.

What affects happiness is not so much the amount of money that is given, but the impact that one perceives of the donation, adds Dunn. If you see that your money makes a difference in someone else's life, it will make you happy even if the amount you gave is small.

Make sure you buy time

It is also important to consider how your purchases will affect how your time spends. "Use the money to buy a better time," says Dunn. "Do not buy a slightly more elegant car to have heated seats during a two-hour trip to work. Purchase a place close to work so you can use the last hour of sunshine to kick a ball in the park with your children. " Another way to buy time is to outsource tasks you do not like, he adds.

Money brings happiness only up to a point

Researchers divide happiness into two components. The first is "evaluative" and Lyubomirsky defines it as the "feeling that his life is good, he is satisfied with his life, he is progressing towards his goals." The other is "effective," which measures how often one feels positive emotions Such as joy, affection, and tranquility, compared to negative emotions, says the specialist.

Daniel Kahneman and Angus Deaton of Princeton University found that when they analyzed effective measures, happiness did not increase after a family had an annual income of about $ 75,000. However, they noted a consistent increase in overall satisfaction with their lives.

The bottom line is that when you do not have a lot of money, a small additional sum can make a big difference because there are more essential needs to cover. But as one accumulates wealth, it becomes harder to continue to "buy" more happiness.

Do not get out of control

Finally, researchers agree that spending more than one can afford leads to misery. Taking care of your basic needs and achieving a level of financial security is important.

Gilovich says that while his research shows that life experiences generate more happiness than material goods, people should obviously buy essential things first.

Meanwhile, some studies have shown that debt has a detrimental effect on happiness, while savings and financial security often increase it. "From joy, it is more important to reduce debt than to accumulate savings," says Dunn.

So before you spend all your money on a dream vacation, be sure to cover your basic needs, pay your debts and have enough to protect yourself from the problems of life.

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