Does Money Really Make People Happier?
“Money, money, money, Always sunny, In the rich man's world.” Abba gets me, that’s what you’re thinking. We all have hopes of someday finding a money tree of sorts—a limitless source of income and cushioned financial security with Benjamins to spare. It’s a common assumption that money will solve all your problems, that it’ll buy you happiness. That assumption is only partly true.
“We equate money with security and freedom, which inevitably leaves us feeling insecure and constricted,” says David Geller, author of Wealth & Happiness (GV Atlanta, Inc., 2012).
In his book, Geller shares a core message that money is not security or freedom. It’s not going to turn an unhappy life into a happy one. But money is a tool, and you can use that tool to find happiness and better your life.
“The purpose of having wealth is to use it to create the life you desire, enhance the lives of the people you care about and leave a legacy that represents your passions and values,” he says. That’s happy.
Charles Richards, author of The Psychology of Wealth (McGraw-Hill, 2012), agrees. “It’s no coincidence that money is also called currency, taken from the word current—the flow of electric charge through a conductor,” he writes. “Learning to manage money responsibly and serve others is like being able to use electric current in a productive manner. We can become powerful transformers for the currency of society. How we use that power is a great responsibility.”
Get this: After a modest level of income, there isn’t really evidence to suggest that people’s happiness increases with their wealth. Instead, whether you’re loving life or hating it really depends on how you’re using your money.
But does that really matter? Yes, yes it does. There are steps to happiness, and the first one is to achieve a stable lifestyle—not to indulge in your next dose of pleasure. After the anxiety to provide life’s basics, like food and a roof over your family’s head, is diminished, then you can look to the pleasurable perks of financial success, like reservations to that fancy French restaurant around the corner or a drive in that shiny red sports car you’ve had your eye on for, like, forever. But that’s not what the ultimate goal should be; luxury items won’t make you happier—not in the long run.
“The purchase of those luxury goods or experiences does provide a short-term burst of pleasure, but it quickly fades,” Geller says. “Giving up happiness to purchase pleasure is a bad deal. It is almost always a good trade to give up some pleasure to buy additional happiness. We can use some of our freed up resources to help people we care about the most, and as we do that, we are likely to get a big boost of happiness.”
Geller says people should use their financial success to build better relationships, for more engaged experiences or to make a difference in the lives of the people who matter most. Wealth is about the resources we have to build a life we really, truly want.
“When we define wealth in purely financial terms, we underestimate the power of our other elements of wealth, and we often end up overlooking compelling solutions to our most powerful opportunities or challenges,” he says. “The truth is, in many cases, our nonfinancial elements of wealth are considerably more powerful than our money.”
Happy might be hiding around the corner, so now you just have to go find it. But how?
Geller suggests first reflecting on what you enjoy most about your life, what stresses you out the most and what parts of your life could use some positive transformation. Number two: Share your goals with friends and family—and stick with those who are supportive of your dreams and your plans to change certain aspects of your life. And then it’s time for some action—make one incremental change, a change that will push your life toward a better, and happier, future.
“Success does not require a great deal of money,” says Richards. “What it requires is a belief in one’s inherent worth and a willingness to make a conscious investment in oneself…. A new state of mind must be put into practice in order to move forward in life and achieve something greater.” Success—and happiness—comes from making the right choices and acting on your passions.
Like Geller says, “Happiness takes work, and happiness takes time.” So take a deep breath, and chase happy.