Many of us become frustrated when we think about the things we would love to buy – if we only had the money! If only we had enough cash to extend the house. If only we could afford another holiday. If only we could change the car. It’s quite easy to make a list of the things we don’t have and wish for the money to buy them. It doesn’t usually cheer us up!!
Many of us are never satisfied with how much money we have. The question often asked is how much money do we need to be happy? Research indicates that there is a measurable connection between income and happiness. These studies show that people with a comfortable living standard are happier than people living in poverty. However, research also shows that additional income does not ‘buy’ any additional happiness once we reach a comfortable standard of affording the daily essentials – food, clothing, heat etc. If we are struggling with our finances anxiety certainly eats away at our happiness. But once we have enough money for ‘living’ thousands more cash would not make a significant difference to our happiness levels. This is not to say that winning the lotto would not throw us into a happiness spin! It certainly would! We’d buy lots of things that we could never have afforded. We would party, holiday and hopefully spread a little joy amongst those whom we love. However, after a few months new millionaires adapt to their new lifestyle. They adapt to all their new material possessions. No matter what we buy or win we remain the same vulnerable person with the same genetic imprint, same life history, same inhibitions and fears etc. Whatever ‘happiness’ money buys is not sustainable. We adapt to material goods and eventually end up wanting the next best thing!
Often our ideas about the relationship between money and happiness are misguided. In research conducted at the University of British Columbia with a national sample of Americans, people thought that their life satisfaction would double if their incomes doubled. However, the data showed that people who earned twice as much as the baseline were just 9 percent more satisfied. Indeed, the same researchers showed that it turns out that what we do with our money plays a far more important role than how much money we make.
Even if we did acquire more money and could start buying all the things on our wish list from new houses, cars, holidays, yachts etc. this spending spree would be ineffective and we would discover that turning money into happiness is not necessarily guaranteed. The same researchers showed that in addition to buying more experiences, you would be better served in many cases by simply buying less — and buying for others.
We are all familiar with the concept of overindulgence. We have often over-ate, over-spent or over-partied!! However, the research shows that “underindulgence” — indulging a little less than you usually do — holds the key to getting more happiness for your money. And spending on other people has a more profound affect on our mood. It makes us feel better. So under-indulging is not about being mean. It’s about putting some thought into how we spend out money. By choosing wisely how we spend our hard earned cash and being less obsessed with our own ‘wish list’ we might get better value!
