WHITNEY CAIN, PHD

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Money & Happiness

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I was deeply comforted as a kid by grown-ups’ promises about adulthood.  Their assurances about how I wouldn’t worry so about my appearance and how others would be more inclusive brought great comfort to my weird little self.

Alas, now another item from those well-meaning shepherds’ treasure troves of wisdom can be added to the “not so much” file.  Research shows money can, indeed, buy happiness.

Most of us can’t stand the idea of turning our backs on the notion “money doesn’t buy happiness.”  And findings from a 2010 Princeton study have kept the dream alive.  The study’s authors found increases in yearly incomes up to $75,000 corresponded to increases in daily experiences of happiness, but happiness plateaued for those earning over $75,000.  Hence, your neighborhood Hydrologist or Health and Safety Engineer’s happiness is equal to millionaires’.  Put that in your pipe and smoke it, Warren Buffet.

But here’s the rub:  the Princeton authors also found people’s overall happiness (a.k.a. life satisfaction) continued to climb with their incomes.  Consequently, people making far above $75,000 per year were far more satisfied with their lives than those making $75,000.  Point goes to Mr. Buffet.

I’m not sure what to do with this information.  Assuming our basic needs are met, it doesn’t seem helpful to suggest we might perk up a little if we could make an extra buck or two.  On the other hand, I’m more confident leaving paying jobs to live off the land in a yurt isn’t a necessary path. 

There is a kernel, though.  Additional research shows money’s influence on happiness isn’t just about the dollar amount; it’s also about where we direct our spending.  For example, spending money on outsourcing tasks you don’t enjoy or on experiences with people you do allows all kinds of happiness to bubble up.  Conversely, money spent on stuff leads to fleeting happiness at best.

Taken together, these studies show what we likely already knew:  Having plenty of currency is nice.  It’s even nicer if it gets us out of stuff we don’t like and helps us make room for experiences with people we do like. Emphasizing connection versus collection and deepening our pockets means happiness is just around the corner.

Resources

  • Auerbach, D. (2012). Growing jobs that pay $75,000 a year.  AOL.finance. Retrieved from https://www.aol.com/2012/07/26/7-growing-jobs-that-pay-75-000-a-year/
  • Dunn, E., & Norton, M. (2013).  Happy money:  The science of smarter spending.  New York:  Simon & Schuster.
  • Kahneman, D., & Deaton, A.  (2010).  High income improves evaluation of life, but not emotional well-being.  Proceedings of the National Academy of the Sciences of the United States of America, 107(3), 16489-16493. 
  • Panati, Charles. (1999).  Words to live by:  The origins of conventional wisdom and commonsense advice.  New York: Penguin Books.
  • Photo Credit:  Nikolay Frolochkin (May 4, 2016).  Retrieved from https://pixabay.com/en/users/NikolayFrolochkin-2231981/ 
Whitney Cain