Money & Happiness: It’s how you spend your money that matters.

Money and Happiness

“A materialistic mind is an unstable mind, for its happiness is built on transient, physical circumstances.”

~ Dalai Lama

Robert was a successful Wall Street broker in his 40s who attended one of my “Finding Your True Destiny” online classes a few years ago. He was struggling with his work life; he was successful by all accounts: a great marriage to a beautiful wife, four young kids, and a lovely home in Connecticut. Overall, this was the lifestyle to which many of us aspire, but he shared the truth with me: he felt empty inside. And trapped.

When I asked him what he loved to do in his spare time, he brightened, and the energy in his voice doubled. He said, “I love to work with my hands, to build things!” An avid and skilled carpenter, he created unusual, beautiful coffee tables, end tables, and even unique birdhouses, which he gave to friends and family.  Building just about anything felt good, felt right to him. It fed his soul. Robert felt he was chained to “the Man.” How could he leave this job and the money he was making to do what he loved? But at the same time the thought kept popping into his mind: “It’s not worth it…”

The American dream is instilled in us as we grow up: college, a choice job, marriage, kids, a great house (with granite counter tops!), etc. Our clever advertising industry plays in, employing psychology to condition us to be good little “consumers.” We are trained to long for and accumulate material goods; this increases the company bottom line. And the promise implicit in the advertising is our happiness! Having attained that desired new car, iPad, etc., we will be joyful and our neighbors will be “green with envy!” This creates an obsession with status, achievement, and material wealth on display. It even becomes competitive; which great new restaurant do you frequent? Are your children in the best schools? Do you have the latest cars and toys? If you’re not winning at this image display, the implication is that you are not successful, important, worthy. And of course, deep under that belief hides the fear that you will not be liked.

The downside? We can find ourselves in our 50s or 60s with too way much “stuff” and chained to a job, a mortgage, and the lifestyle we have built up. But we feel unsettled, unsatisfied and ask ourselves, “Is this all there is?”

We are conditioned to believe if we can obtain all the right things, we will be happy. But are we? “More is better” is a bottomless pit; once you have obtained more, you want more. The psychological theory that attempts to identify this is called the “hedonic treadmill,” the tendency for human beings to always return to the same, fairly stable rate of happiness after positive or negative events in their lives. Read more about it in this New York Times article “But Will It Make You Happy?”

People quickly become used to changes, however challenging, in order to maintain their usual level of happiness. For example, over time purchasing a house becomes the norm and we no longer derive pleasure from it. In the late 90s, Michael Eysenck, a British psychologist, described the “hedonic treadmill theory.” This compares the pursuit of happiness to a person on a treadmill, who has to keep working just to stay in the same place.

Have we sacrificed true happiness in our constant search for superficial pleasures and material possessions? In the U.S., rates of anxiety and depression are soaring. Anxiety disorders cost our country more than $40 billion each year according to the “The Economic Burden of Anxiety Disorders,” a study commissioned by ADAA (The Journal of Clinical Psychiatry. Half of those people in the study with anxiety fit the criteria for depression. Something is amiss.

Let’s look at happiness. Recent research shows happiness is created by feeling fulfilled, by emotional connection, by relationships, by unique experiences, and by achieving goals. A lack of poverty does contribute to happiness, of course, but in an interesting study from Princeton University in 2010, 450,000 Americans were polled, revealing there is an cutoff line of about $75,000 a year. It seems that no matter how much you make beyond that income, you are not substantially happier. Money doesn’t buy you happiness. Our moms were right!

It is how you spend the money you make that matters.

Another recent research study found similar weak connections between money and happiness. In the study entitled “If money doesn’t make you happy, then you probably aren’t spending it right,” the researchers found that experiences actually create lasting happiness for us,” more than the acquisition of tangible items.

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6 Tips to Live a Happier and Meaningful Life

  1. Buy experiences that will engage you rather than material things. We reap far greater happiness from both the anticipation and memories of experiences.
  2. Plan experiences that take you outside your current comfort zone. This is where courage and self-confidence live. Stretch your horizons and gain the excitement and fulfillment from experiencing something new.
  3. Instead of buying one or two expensive trips or experiences, buy smaller, more frequent pleasures that give you variety. Make a list of things you’ve always wanted to do. Choosing experiences which hold an element of surprise or novelty can contribute to the grand spice of life!
  4. Spend time planning your life experiences, anticipating the small and large adventures. A study, published in the journal Applied Research in Quality of Life, showed that the largest boost in happiness comes from the simple act of planning a vacation.  The research found that people viewed their vacation in a more positive light before the experience than during it. In addition, those of us who spend time planning and anticipating more exciting experiences report being happier.
  5. Redefine the Dream. It’s up to us to redefine the dream to represent what really matters: creating a meaningful life, contributing to community and society, valuing nature, and spending time with family and friends. What would make you truly excited, fulfilled, and energized? How about those experiences that make up a full-throttle life: climbing that mountain, rafting that river, or simply having that dinner outside under the stars, with someone special. Imagine that you are sitting in a rocking chair at age 85 on the front porch. Which memories will you relive? Will it be that iPad you owned, the BMW you drove or the experience you had hiking in the mountains that was such a stretch for you?
  6. Decide how you want to live your life. What values are important to you? If you want to live a more meaningful and purposeful life, follow what feels good, and focus on what matters: connection to those you love. Put your time and money toward what you value most and make your dreams happen!

 How are you spending your money on things that bring you happiness?  Have you planned a trip and found the pleasure and anticipation of planning a happy time?  I’d love to hear from you. 

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