Does money by happiness?
It’s a strange question to ask, because the answer seems self evident, but it’s an important one to consider when we think about wellbeing. People work hard to earn money. They work harder and longer hours to earn more money. Dental practitioners are graduating with more debt than in the past. We are in the middle of a cost-of-living crisis. Housing is becoming more unaffordable. So money is at the forefront of our minds.
Now it’s true that many people work harder in the pursuit of things other than money, and for healthcare workers many find meaning in their work helping others regardless of how much they earn. But there is an assumption that more money will make people happier, and that often drives people to work harder and longer.
The evidence about money and happiness is actually a bit equivocal. On average, wealthier people are happier, and that makes sense. Think of Maslow’s hierarchy of needs – if you have job security that provides for housing and food security, then it is easier to focus on higher order needs that may bring joy, rather than struggling to ensure those basis needs are met. But making more money doesn’t inevitably boost your happiness. And some research suggests that beyond a certain income threshold, life satisfaction doesn’t really increase at all.
A recent study by Kahneman and Killingsworth found that although generally speaking increasing incomes were correlated with increasing happiness, there was a substantial ‘unhappy minority’ - about 20 percent – where their unhappiness diminished up to a point with increasing income but then didn’t progress further. No extra amount of money was going to make these people happier.
One theory on money and happiness is that the act of seeking more money (or a mindset of actively trying to become wealthier) may actually dampen the sense of life satisfaction, and this impairs happiness. Research has shown people with strong financial goals actually reported lower satisfaction across a range of measures – family life, friendships and job satisfaction. And the greater the financial goal, the lower the satisfaction – regardless of actual income.
“It is generally good for your happiness to have money, but toxic to your happiness to want money too much.”
There are probably two reasons for this. One has to do with materialism and how you spend your money – and particularly the difference between spending on experiences versus material things. But perhaps the other more important factor is time. Time is one factor that is critical to our happiness and wellbeing, but it is often a key part of the trade-off to earning more money. Earning more money invariably requires longer working hours. Being time poor is the trade-off for greater wealth. But we are robbing Peter to pay Paul.
Happiness is a key part of our wellbeing, and an important factor in our ability to flourish. More money isn’t always the solution. But more time often is.