How Much Money Does it Really Take to Buy Happiness?
Whoever said money can’t buy happiness wasn’t telling the whole truth. Money can indeed buy certain necessities in life that contribute to our overall well-being. For example, money buys shelter, clothing, food, and transportation. Nonetheless, the example becomes flawed when people mistakenly believe that a new television or the latest fashion trend will unlock a new level of happiness.
Deciding how much money it truly takes to be happy is a personal adventure only you can take, but many people start off on the wrong foot by focusing on material things. Dr. Ryan T. Howell, from San Francisco State University, studies how psychology affects our purchasing decisions and happiness. In a survey of more than 1,600 adults, he finds that compulsive buying is fueled by poor credit management and a belief that new purchases will create a happier life. Shoppers reported that they bought items in order to get a buzz or place themselves in a better mood.
On a positive note, there is hope. “While we know that a person’s values impact their shopping habits, values aren’t the easiest thing to change. However, our statistical models showed that, even if you are materialistic and you have the desire to acquire more possessions, it’s how you manage your behavior that counts,” explains Dr. Howell. “Our findings suggest that you can keep your shopping under control by paying attention to your credit cards and checking in with yourself about whether you are shopping for emotional reasons.”
If you must shop, try shopping for experiences instead of things that lose their appeal over time. Dr. Thomas Gilovich says adaptation is an enemy of happiness. “We buy things to make us happy, and we succeed. But only for a while. New things are exciting to us at first, but then we adapt to them.” Your shiny new big-screen TV might make you happy for a few days, or perhaps even a year, but at some point it becomes just a TV. In comparison, money spent on a vacation can provide fond memories over an entire lifetime.
“Our experiences are a bigger part of ourselves than our material goods,” says Dr. Gilovich. “You can really like your material stuff. You can even think that part of your identity is connected to those things, but nonetheless they remain separate from you. In contrast, your experiences really are part of you. We are the sum total of our experiences.”
The act of saving money can help alleviate financial worries, therefore raising your chance of happiness since you will be in a better position to afford the necessities of life. In fact, saving money affects happiness more than how much you earn. A survey from Ally Bank finds that 38% of people with a savings account say they feel extremely or very happy, compared to only 29% of those without savings accounts. Overall, 84% of people say saving money makes them feel good — ahead of eating healthy at 74% and enjoying work at 68%.
If you desire actual dollar amounts, Ally Bank finds the more you save, the more likely you are to be happy. Of those who said they felt extremely or very happy, 34% had less than $20,000 in savings, while 42% had $20,000 to $100,000 in savings. Furthermore, 57% who felt happy had $100,000 or more in savings. Yet increments of happiness tend to decrease significantly after annual income reaches more than $50,000. Of those who said they felt extremely or very happy, 25% earned $25,000 to $50,000, while 40% earned $50,000 to $75,000. Happiness peaked at 48% with people who earned $100,000 to $150,000, and declined to 45% for those who earned over $150,000.
Follow Eric on Twitter @Mr_Eric_WSCS