As newlyweds and college students, my wife and I brought home just enough income to pay rent and eat enough pretzels to satisfy a thousand bar counters. If the expression "money was tight," is any true indicator of limited funds, then money was choking us, loosening its grip just enough for us to eke out a few surviving breaths. In spite of our financial stresses, we were genuinely happy people. A few years later, although I'm nowhere near wealthy, we bring in considerably more money to the point where we're relatively financially secure (emphasis on the word "relatively") especially compared to where we were. Given our current financial confidence, it's odd that we're not really any happier than we were when money was scarce. Even more interesting, I still worry about money.
Does Money Create Happiness?
It's likely that many middle-class Americans would answer, no, to the question of whether or not money "creates" happiness, and I would respond the same way. Still, given the opportunity to have more, we tend to jump at the chance. A large amount of research also indicates that, no, money doesn't necessarily directly relate to what the academic literature refers to as subjective well-being.
In fact, many studies show the opposite. A new study that's bound to generate a lot of attention surveyed the super-wealthy, those whose net worth and assets exceeds $25 million. Although the details of the study have yet to be published, The Atlantic's Graeme Wood discusses some of the results in his article, "Secret Fears of the Super-Rich".
The findings were gathered from a survey developed by Boston College’s Center on Wealth and Philanthropy, in which the super-wealthy were encouraged to reflect upon how enormous wealth has influenced their family life and general well-being.
Out of the 165 participants, Wood reports, "The respondents turn out to be a generally dissatisfied lot, whose money has contributed to deep anxieties involving love, work, and family. Indeed, they are frequently dissatisfied even with their sizable fortunes. Most of them still do not consider themselves financially secure ..."
Prosperous participants in the survey also mention problems concerning entitled children with a dwindling work ethic and "friends" with less than altruistic intentions. One respondent flatly admits, "The novelty of money has worn off."
High Expectations
Although the survey doesn't prove money leads to a higher degree of unhappiness, it may provide an interesting look into human behaviors and feelings that money can magnify or detract from, particularly higher expectations and desensitization.
One study, "Money Giveth, Money Taketh Away: The Dual Effect of Wealth on Happiness," published in Psychological Science, indicates that the very wealthy often develop an inability to enjoy life's simple moments. The authors state that money "impairs people’s ability to savor everyday positive emotions and experiences."
This study may risk generalization, but I can relate. As a college student, I remember returning to my parents' home on break, opening the pantry, and standing paralyzed at how many food options were available for a household of three. I was accustomed to slopping ketchup on a nuked potato, which I admittedly enjoyed. When at home, however, the potato ketchup duo became unimaginable because of my raised expectations. To further highlight the relativity of expectations, my younger brother, who still lived with my parents, would complain about how there was nothing to eat. I, of course, did the same when living at home.
How We Spend Money
Money, then, can have the same impact on our expectations, which in turn, may affect levels of happiness. On the other hand, it seems that the influence of money on happiness depends more on what we do with it.
In a 2008 issue of Science, the authors of "Spending Money on Others Promotes Happiness," suggest exactly what the title indicates. Specifically, the authors maintain that "spending money on other people may have a more positive impact on happiness than spending money on oneself." It seems that research tells us what we already know: giving can be better than receiving, and it's how we wield the tool, not the tool itself, that makes the difference.
It's Complicated
In the end, it seems, the question of whether or not money creates happiness is too simplistic and deeper exploration only prompts further complicated questions. How do we define happiness and how can it be measured? By money, do we mean net worth, level of income, or the social rank in which our income level places us (whether we like it or not)? Money tends to amplify who we already are and enables more choices, which can be good and bad, depending on how effective we are at decision-making.
I can genuinely say that my stress level is considerably decreased when my income increases. But does less stress equal greater happiness? Maybe, but some could argue that stress creates growth, which can lead to long-term happiness. Even though I can cover car repairs with minimal financial damage, I still get angry when it happens because I'd rather see my money go somewhere else, or stay where it is. I'm just happier that way.
Sources
- Dunn, E., Aknin, L. & Norton, M. (2008). Science, 319:5870. 1687-1688.
- Quoidbach, J., Dunn, E., Petrides, K., & Mikolajczak, M. (2010). Money giveth, money taketh away: The dual effect of wealth on happiness. Psychological Science, 21:6. 759-763.
- Wood, G. (2011). Secret fears of the super-rich. The Atlantic.
Christopher Lee - I teach academic research at the college level and know how to filter out the junk
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