Money and happiness.
For most of us, we live in a make belief world of if-onlys. If only I had a better car, if only I can travel, if only I can afford better clothes…We believe that once we can afford these things, only then we can be genuinely satisfied with our lives. But is there a basis to such a belief?
Researchers and experts have long debated and discussed the true factor to happiness. And along with it, is how happiness is related to money. It’s inevitable. In our society, money is important.
We need money to eat. We need money to learn. And we even need money to work. Yes, imagine that! You don’t just work to earn money, but you need money to be able to work. Transportation fees, car maintenance, work attire, money to go out with clients…all those require some sort of spare cash in hand – all in return for that paycheck.
But does money really lead us to happiness?
When money and happiness is brought up, the most talked about study is the 2010 research by Kahneman and Deaton. They discovered that an individual’s emotional well being improves when they earn around $75,000 a year, but there is no significant progress to the emotional well-being beyond that amount.
In a way, this makes perfect sense. Those who earn below $75,000 have to worry more on basic necessities – food, transportation, rent. If they’re raising a family, it’s understandable why they’d believe money can bring happiness. They were raised to subconsciously link money with happiness because money brings security.
But why is it that higher salaries does not equate to more happiness?
To clarify, Kahneman and Deaton’s research doesn’t claim that being rich can lead to unhappiness. What they discovered instead is that, increased salary won’t make you any happier. After a certain point of wealth, the money will only give you immediate pleasure but not long lasting happiness.
It’s important we differentiate pleasure from happiness because they are two very separate things.
Pleasure is a short-term feeling that often comes with external events. For instance, buying yourself a cup of coffee. You associate the cup of coffee with a positive feeling, enough to make the rest of the day bearable. But other external factors such as events and experiences can rip that pleasure away from you. So, if someone were to bump into you and splash the coffee all over your clothes, you’d feel annoyed. Thus, cancelling the pleasure you were immersed in.
On the other hand, happiness is long-lived. It’s a state of being content and it cannot be achieved through substances. It comes with being surrounded by the people we care about and doing things that we enjoy. And most importantly, while pleasure is linked to dopamine, happiness is tied to serotonin.
Dr. Robert Lustig explains why those two neurotransmitters make a major difference in our well-being. According to Lustig, “Excess dopamine can lead to addiction, which erodes both present and future happiness.” So, the more we seek pleasure, the more unhappy we get.
So, what do humans seek to achieve happiness?
Maslow’s Hierarchy of Needs have long been the benchmark to measure human’s motivations.
The Hierarchy is divided into three segments – our basic needs, our psychological needs, and our self-fulfilment needs.
Based on this hierarchy, it’s easy to infer that money can only help us achieve our basic needs. We need money for food and water (physiological) and health and property (safety). But everything else on the hierarchy depends on other factors.
Money doesn’t necessarily lead us to long lasting friendships or intimate relationships. Neither can they guarantee competence or an individual’s success.
Which leads us to another question, if money can’t bring us happiness then what can?
Actually, money can bring you happiness. It just depends on how you use it.
A recent study claims that money is the road to happiness but only when you spend it on others. This is what experts like to call “pro-social spending.” Pro-social spending is when we use our money to benefit other people. Whether it’s donating $1 everyday to the homeless or getting your siblings their favorite snacks, it’s the act of giving that engulfs us in warmth and contentedness.
This makes perfect sense. Engaging in acts of kindness produces endorphins. Endorphins then stimulates the production of serotonin, a feel-good chemical that heals your wounds, calms you down, and makes you happy! And kindness also helps in decreasing 23% of our stress hormone called cortisol. And the best part? People who are kinder age slower than the average population!
No wonder many researchers are encouraging people to give back to the community if they wish to seek life-long happiness.
Okay, so now you know that if you spend your money on others, you will finally be happy. So, does that mean you shouldn’t spend money on yourself at all?
Nope! By all means, invest in yourself.
“The best investment you can make…is in yourself. The more you learn, the more you earn.” – Warren Buffet
It’s what and how we spend it that makes the difference.
The best way to spend your money so you’re on your journey to contentedness is to splurge them on experiences, not materials.
Buying a new iPhone can make you feel good but how long will that feeling last? Until the latest one arrives? Compare that to going on a trip with your loved ones. You can make memories that can last a life-time and experience things that materialistic items simply can’t give to you, like learning another culture, talking to new acquaintances and capturing important moments on your trip.
Experiences like those are ones that enrich our lives and transform us into a better version of ourselves. As humans, we thrive on our community and socialization. When we give back and spend quality time with the people we love, we inevitably grow to our highest potential. And only then can we truly achieve happiness.
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