Almost all of us want to be happy in our life. One of the reasons we engage in our chosen work is because we hope to derive some happiness from it. However as Barry Schwartz contemplates, a large population is deprived of deriving satisfactions from their work. Many such people among us thus, work for paycheck alone and perhaps, hope that money would bring that happiness!
In the American freshman surveys, most people when asked why they get an education or why they work answered: “To earn money”. As you can see from the graph above that most young people strongly believe that earning a lot of money, material consumption, actually leads to happiness. And it is interesting to see that how this perception developed over the last few decade as consumerism grew. Though it is an USA based survey, I believe it would be similar in most of the countries.
The relationship between money and happiness is intriguing and can cause many animated debates. It is interesting to ponder over few questions?
Can money buy happiness?
Can lack of money negatively impact happiness?
How much money do we need to be happy?
Research done by ED Diener & Robert Biswas Diener, Ed Diener & Martin E.P. Seligman, Raymond Firmalino and others suggest that the money can bring happiness when it can help individuals to come out of poverty, but beyond that it has limited effect on our happiness. In their study, Drs. Diener and Biswas-Diener write this about Subjective Well-Being (SWB) or in simpler terms, about happiness :
“More money may enhance SWB (subjective well-being) when it means avoiding poverty and living in a developed nation, but income appears to increase SWB little over the long-term when more of it is gained by well-off individuals whose material desires rise with their incomes.”
So for many of us who are not really fighting poverty, we need to really ponder about our needs and wants. Do we really need to buy that next expensive gadget or bigger car when we have excess money?
As Mohit Satynanad says in his beautiful article about choosing to work lesser, “Material progress gives us the choice to trade our earning ability for more consumption, or more time.” It is for each of us to think for ourselves: How much is enough?
In this video, Dr. Dacher Keltner, a professor of psychology at the University of California, Berkeley and founder of Greater Good Science Center discusses the research and statistics that involve relationship between money & happiness. Here are some excerpts –
“Think about how people rearrange their lives in fundamental ways in the pursuit of materialism and money. So they’ll do longer commutes for that better job when we know scientifically long commutes deteriorate not only your happiness but your health and your cardiovascular profile. They might leave a community for a higher paying job. They might have long distance relationships or what we’ve seen well-documented in many parts of the world is working extremely long hours to make more money. That begs the question: does money bring happiness?”
As Dr. Dacher mentions, in the USA earning beyond $ 75000/p.a. doesn’t increase happiness significantly. We can perhaps come up with a figure more relevant our own nation depending upon its purchasing power parity (PPP).
There is another research by Thomas Gilovich at Cornell that suggests that most of us are happier when we spend money on experiences rather than our possessions. So a travel or adventure sports or learning something new is likely to make you more happy than buying a new gadget. You can also watch another interesting discussion ‘Do What You Find Interesting‘ with Thomas Gilovich on YouTube.
I will be following up this post with the second part: ‘How much money do you need to be happy?’ later this week. I am planning to write about few real life examples and experiments people are doing with money in that post.
What do you think? Which part appealed to you more? Does money equal to happiness? What makes you happy? What would you love to do if money is not a concern? Can you find it out for yourself how much money you really need to be happy? Leave a comment here if you have an interesting perspective to share.
Update: December 4, 2015
You can read second part of this post here: How much money do you need to be happy?
The videos & research stated above are available publicly and images used are screenshots from the video.