Does More Money Buy More Unhappiness?
We’ve all heard the saying, “Money can’t buy you happiness.”
Whenever someone says this I immediately think…”I don’t know if I agree, I’m pretty sure I’d be a bit happier with an extra $100,000.00 in my bank account!”
And yet, countless studies have proved that once our basic necessities are taken care of, food, shelter, clothing etc., more money doesn’t lead to more happiness.
A recent study published in Nature Human Behaviour revealed that $95,000 is the magic number. This is the amount that allows one to achieve life satisfaction (the ability to think about your life and feel content). After this, additional money is no longer correlated with greater satisfaction.
The number is lower if you’re just striving for emotional satisfaction (how often you feel happy, sad, joyful, mad etc. on a daily basis). To achieve emotional satisfaction you need to make between $60,000 - $75,000.
When it comes to having MORE, more money or more success, some studies even suggest that too much of a good thing can actually lead to greater rates of unhappiness.
How could having more money or more success lead to greater rates of unhappiness?
I mean, wouldn't it be nice to have the funds to fly to a tropical destination on a whim, or to drink only the finest champagne…if that’s what you’re into?
Well, it’s not technically having more money that leads to unhappiness, instead it’s about what we have to give up in order to attain more.
If you want to live in a huge house, go on fancy vacations and have nice things then you need to work, work, work.
The acquisition of more money and more success comes at a cost, usually in the form of time.
If you want to make the big bucks you need to spend more time at the office which means less time with your family, less time for your hobbies and even less time to sleep and relax.
As you get older you start to realize that time is a limited and precious resource. No matter how much you work you can never buy more time.
If you love your job, then more time spent working might not be a bad thing. However, if work is a grind and you’re doing it solely to make more money or gain status, it will likely lead to increased stress and unhappiness.
So, it’s important that you determine how you want to spend your limited time on this earth.
Are you happy spending extra hours behind a desk for the purpose of acquiring more, more, more OR, would you rather spend your time doing the things that make you happy?
It’s a difficult balancing act.
When you start to value THINGS over people and experiences this can lead to feelings of depression and anxiety.
When you’re constantly trying to keep up with the Joneses, this can lead to feelings of inadequacy.
When you spend all of your time comparing what you have to what “they” have, this can lead to feelings of jealousy.
There will always be someone wealthier, prettier or more successful than you. But, on the flip side, there will always be people who have less than you.
One of my favorite quotes is by Theordore Roosevelt who said, “comparison is the thief of joy.”
When you start to compare what you have to what others have it rarely leaves you feeling good about yourself.
Social media only amplifies this issue.
Now, not only do we compare ourselves to the people that we actually, physically interact with (neighbours, friends, co-workers) but we also compare ourselves to people on Instagram, Facebook and Twitter.
People we’ve never met, and likely will never meet.
People with whom we have no context in regards to their life. People who may spend hours perfecting their Instagram pictures to portray a life that they don’t actually lead.
Excess wealth can lead to FEELINGS of isolation.
We can take this a step further.
Excess wealth can also lead to ACTUAL isolation.
My husband has an Aunt and Uncle who are incredibly wealthy.
As they’ve accumulated this wealth over several decades they’ve also slowly inched farther and farther away from their family.
Extreme wealth can result in people coming out of the woodwork looking for monetary handouts. In the case of my husband's Aunt and Uncle, they had a few family members constantly asking for money.
This can be super awkward and uncomfortable and can result in the falling out, and isolation, of family members.
Today my husband's Aunt and Uncle have isolated themselves from the family. They tend to only associate with other people in their financial echelon. In many ways, I understand where they’re coming from. They’ve worked hard for their success and they don’t owe anyone anything.
However, for the family members that aren’t coming after their money, it’s disappointing. And it’s sad for them, they’re missing out on a lot of amazing family memories and experiences.
The ability to savour (having positive feelings during an experience) is correlated with increased levels of happiness.
There’s also a proven relationship between increased wealth and a decreased ability to savour the little things in life.
Think, if you had access to the best food, wine, hotels and vacation destinations at all times, would you savour it in the same way that you do now?
If you’re able to eat the most expensive caviar and drink the finest champagne at every meal over time it loses its luster.
It’s no longer special.
It’s repetitive and banal.
For those of us who have to work hard and save in order to afford that nice bottle of champagne, or a special vacation, we tend to savour it more and, as a result we tend to feel more joy around the experience.
It’s special, novel and exciting.
If you are wealthy and successful, or strive to achieve these things, you’re not destined for unhappiness.
It’s possible to be wealthy and ambitious and happy!
But, for some, it might take a bit of work and some re-focusing of values.
Here’s a list of actionable tips that you can apply to ward off feelings of unhappiness that are often associated with large sums of money or great amounts of success.
If you want to be happy then focus your attention on how you spend your time rather than how to make more money.
People are happier when they spend time socializing and creating new experiences.
When it comes to spending money, prioritize experiences over things. The enjoyment we get from buying something new is fleeting. That new shirt, new car, or new house will bring you some immediate joy but then it’s on to the next thing.
Experiencing a trip to a new destination or even taking your kids to the beach or the zoo will be more meaningful and joyous in the long term.
If you hate cleaning your house/cooking/shopping etc., and you can afford it, hire someone else to do it. Then use the time you would have spent engaged in that undesirable activity to do something fun. Take your partner on a date, paint a picture or go for a bike ride with your kids.
Trading money for time has been correlated with increased rates of wellbeing. So, if you feel a bit overwhelmed and crunched for time, don’t feel guilty about offloading a task you don’t like.
There are only so many hours in a day and time is your most valuable resource.
If you’re lucky enough to have lots of money but you aren’t feeling especially happy or fulfilled consider giving.
Studies have shown that engaging in prosocial spending (spending on others) can make you happier.
So, donate to your favorite charity or set up your own scholarship fund.
Even if you don’t have excess money to give away consider giving in the form of time. Volunteer or become a mentor.
Seemingly mundane daily activities like exercising, playing guitar or having a glass of wine with a friend have been shown to be more effective in increasing overall happiness then major life events (buying a house, getting a new job).
It’s these little things that are capable of providing boosts to our mood on a daily basis and, as a bonus, they generally don’t cost very much money.
So, make sure you schedule some time each day to engage in an activity that brings you joy.
Socializing with others has the equivalent health benefits to regular exercise and not smoking.
Similarly, the happiest part of peoples day usually occurs when they are socializing with others.
Set aside quality time with your family, friends or co-workers or a regular basis. Shut off the T.V. and enjoy dinner with your family, go for an evening run with a friend or schedule a night out with your partner.
If you get up every morning and do the same old thing... commute to work, eat lunch at your desk, commute home, go to bed…this can become redundant and depressing, regardless of how much money you’re making.
Variety increases excitement and engagement in people's lives and it doesn’t require any money to shake things up and add a little bit of diversity into your day.
Try a new activity, visit a new neighbourhood or even attempt to cook with a new recipe.
Being truly present and engaged in what you’re doing can increase happiness.
The next time you are at your child’s school play/basketball game/track meet...shut off your phone and stop reading your work emails. Focus on what is happening in the present. It’s these experiences, not your emails, that will bring feelings of joy now, and when you look back on them in the future.
Let’s get things straight. More money can lead to more happiness.
Money provides freedom, such as the freedom to choose a career you love or the freedom to give generously.
Money also provides opportunity, such as the opportunity to travel or send your children to college.
But, more money can also lead to more unhappiness.
It’s a matter of how you attain more.
It’s about what you are, or aren’t willing to give up. Remember, time is money.
It’s about why you want to attain more money (more stuff vs. more experiences) and what you want to do with more money (buy a big house vs. engage in prosocial giving).
It’s also about who you want to share it with (isolation vs. socialization).
So, I guess the saying is true, “money can’t buy you happiness,” but if used correctly it can buy a ton of freedom and opportunity!
Jessica is a professional researcher and freelance writer. She writes about all things related to personal finance, psychology and education at The Financial Graduate.