We have been talking about New Year's resolutions lately, among them were "Exercise more often", "Eat Healthier and Diet" and "Quit Smoking". Today we focus on another common resolution "Spend Less, Save More". But is this really a good idea? Will it make me happy to not spend the money but to save it?
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We
live in a world where happiness is advertised to us as reachable by
material things. Be it a big house, a new car or a vacation in the
Caribbean, we are promised that we are only one step away from greater
happiness by simply buying things. There is no doubt that money controls
our life to a great extent. But does money truly make us happy?
Money Matters – to a Certain Degree
The
relationship between money and happiness has fascinated researchers for
many years. Fifteen years ago, it was shown that there is a high
correlation between the general wealth of nations and the mean reports
of subjective well-being (SWB), the standard measure for happiness.
However, within each nation, there were only small correlations between
the two (see also "The Happiest (Or Wealthiest?) Countries On Earth" on page 14).
Moreover, an increase in individual income did not have a clear effect
on SWB and recent economic growth was followed by only a small rise in
SWB [1]. The study concluded that more money increases SWB when it means
avoiding poverty (as the difference in SWB between developing countries
and developed countries suggests) but income does not change the SWB
levels over the long term.
Other
recent studies have examined happiness levels with regard to SWB
showing that a high income improves our evaluation of life in the
rational sense, but not SWB in the emotional sense. In other words,
money makes you think you feel better but it actually does not [2].
Finally, a fascinating study examined the happiness levels of lottery
winners and accident victims along time. Surprisingly, after a certain
period of time had passed (a year), both groups returned to their
original baseline happiness levels [3].
Overall,
it seems that money plays a relatively minor role in happiness – it is
important to a certain degree, to provide for the basic necessities in
life, but once these necessities are met, money will have almost no
effect on our happiness levels.
Culture and the Money-Happiness Relationship
To
understand the relationship between income and happiness, the
consumption norms of a society seem to be essential. In a culture where
ostensibly money plays such a large role in defining our social class,
it may have a prominent effect on our happiness, and not necessarily in
the right direction. People who value money highly and are materialistic
tend to be less happy [4-6]. This is due to motives of social
comparison, seeking power, showing off and an urge to overcome
self-doubt.
These
bad side effects of materialism were not only found in people with a
materialistic personality, but also in people who were simply exposed
enough to a consumption-promoting environment [7].
So whether money itself makes us happy or not, it is clear beyond doubt
that pursuing it definitely makes us feel less happy.
If Not Money - Then What Does Make Us Happy?
Autonomy
seems to be part of the answer. A meta-analysis with data from 63
countries showed that individualism was consistently a better predictor
than wealth for happiness [8]. Many other studies emphasize the positive
effect of gratitude on an individual's happiness [9]. Grateful thinking
and gratitude expression improve mood, promote savoring the good
things, boosts our self-esteem, and helps strengthen social bonds and
relationships.
Leading
a healthy lifestyle with regard to food, physical activity, and sleep
also has an effect on our happiness. Bad foods (covered in our last
issue on Nutrition and Neuroscience) has a bad effect on our mood [10],
while engaging in physical activity enhances self-esteem, improves our
mood, and reduces anxiety [11]. Sleep also has an important role for our
happiness [12] - dreaming in particular - is an important mechanism to
deal with painful memories [13]. In addition, sleep deprivation
decreases our job satisfaction [14].
Tips for Seeking Happiness
Overall,
it seems that money is a bad focus point to achieve happiness. If you
want to enhance your happiness, you should concentrate on the following:
- Do not set money as your top priority
- Express gratitude and remember to be grateful especially for the things you may take for granted
- Lead a healthy lifestyle – move more, eat healthy, and SLEEP!
[1] Diener et al., Social Indicators Research, 2001
[2] Kahneman and Deaton, PNAS, 2010
[3] Brickman et al., J Pers Soc Psychol, 1978
[4] Srivastava et al., J Pers Soc Psychol, 2001
[5] Kasser et al., Motiv Emot, 2014
[6] Nickerson et al., Psychol Sci, 2003
[7] Bauer et al., Psychol Sci, 2012
[8] Fischer and Boer., J Pers Soc Psychol, 2011
[9] Watkins et al., Soc Behav Pers, 2003
[10] Golomb et al., PLOS One, 2012
[11] Fox, Public Health Nutr, 1999
[12] Griffith and Rosbash, Nat Neurosci, 2008
[13] Science Daily, UC Berkeley
[14] Science Daily, ESRC
by Michelle Livne, PhD Student AG Sobesky
This article originally appeared December 2015 in Volume 08, Issue 4 "Money on My Mind"
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