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At MoneySense, we spend a lot of time coming up with ways to help you grow your wealth — but does more money really make you happier? Popular music insists it doesn't: we've all heard the refrain that says the best things in life are free. But hardly any of us act as if we really believe that notion. As much as we know the value of relaxation, friendship and a walk in the woods, we can't help but pursue the next promotion, the faster car, the bigger house.
To find out more about the link between money and joy, we turned to Tal Ben-Shahar, a 35-year-old Harvard psychology lecturer and the author of The Question of Happiness. He teaches what is by far the most popular course on the Harvard University campus. It's called Positive Psychology — commonly referred to as the "how to get happy" course — and he has devoted years of study to discovering what gives us bliss. He told us that money does play a role in making us content with our lives, but it's both more and less important than you may think. He also gave us some practical tips for making yourself happier, no matter how much money you make.
Q: Does money really make us happy?
A: I still remember the first paycheque I received as an intern in college. It was for $1,000, and I was the happiest man alive — for about a fortnight. A few years later, after graduating from college, my paycheque grew to $3,000. Once again, I became the happiest man alive — for a couple of weeks. The same pattern continued each time I received a significant raise or promotion, or whenever I attained a goal.
In fact, I spent close to 30 years of my life unhappily successful. I was the Israeli national squash champion, graduated from Harvard, and had more money than I needed. More than titles and degrees, though, I desperately wanted to be happy, or at least happier than I had been. It was then that I started to study psychology in the hope of finding some answers.
Q: Studies find that about one third of us describe ourselves as very happy. That percentage hasn't changed for decades, despite big increases in income and standard of living. Does that mean happiness is genetically programmed, and money doesn't have much to do with it?
A: No, it means that we have been looking for happiness in the wrong places. While there is some genetic component to our happiness — some people are born with a happy disposition while others are not — our genes define a range, not a set point. A Natural Born Grouch may not be able to transform himself into a Pollyanna-ish Romantic, but we all can become significantly happier. And most people fall far short of their happiness potential.
Researchers like psychologist Ed Diener found a very low correlation between material wealth and happiness, except in cases of poverty, where people's basic needs were not being met. These studies point to the fact that happiness is mostly contingent on our state of mind, rather than the state of our bank account.
Q: But a recent study by the Pew Research Center did find that a higher percentage of people in the higher income brackets describe themselves as happy …
A: Money can contribute to our happiness if we understand the nature of happiness. To lead a happy life, we need to experience the combination of both meaning and pleasure. For example, if I find my work meaningful but not pleasurable, I will ultimately burn out; if I find what I do pleasurable but it has little meaning for me, I will quickly lose interest.
People with money have more freedom than others to construct their lives around activities that provide both meaning and pleasure. We still find that most people continue to chase the next promotion, the next raise, the next temporary high, but wealthy individuals who are happier recognize that wealth is secondary, and that happiness is the ultimate currency.
Q: So why are we so fixated on money instead of making ourselves happier?
A: When we were still hunters and gatherers, the accumulation of wealth — of food, primarily — would determine whether we could survive the next drought or the next cold winter. Hoarding became part of our constitution. Today, even those whose futures are secure still have the tendency to hoard beyond their needs. The accumulation of wealth is no longer a means toward survival, but an end in itself. We no longer accumulate to live; we live to accumulate. We also tend to focus on the material rather than the emotional because we value the measurable, such as material wealth and prestige, over the unmeasurable, such as pleasure and meaning.
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