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One Frugal Girl

The Relationship between Money and Happiness

January 11, 2007 by One Frugal Girl Leave a Comment

There is a fundamental human desire to want more. When you get a 3% raise, you wish you’d gotten 5%, but if you’d gotten a 5% raise you’d be disappointed that it wasn’t 8%. Social scientists have been studying the relationship between money and happiness for decades. But the truth is money will not make you happier.

Two fundamental human characteristics ensure money won’t buy happiness. First, people tend to overestimate the amount of pleasure money will bring them. The relationship between money and happiness, is very similar to the relationship between a young child and the world. Young children are fascinated by everything around them, they take joy in the world because it’s new and exciting to them. Adults view money in much the same way. As the thought of higher incomes arise, so do the possibilities of what that money can provide.

Almost everyone in the world has felt that famous after Christmas feeling. The feeling of disappointment after the last present is opened. So much anticipation and preparation is wrapped in that one day, that we are bound to feel disappointed when it’s all over. I’ve heard a number of brides express similar feelings. They spend so many days and nights planning the perfect wedding, that when the day comes it simply cannot stand up to the fairytale picture in their minds. Unfortunately, expectations will almost always be greater than realty.

The second reason money can’t buy happiness: individuals adjust to their wealth. This reason is fairly obvious, for starters, as your income grows, so do your perceived needs. I remember a friend of mine, saying she’d be happy if only she could make $x a year. But when her income increased to the target range so did her desires. Suddenly, $x wasn’t enough to live the life she wanted. As humans make more they expect more. We move into a larger home, and can’t ever imagine living in a smaller one. Oddly enough, between the human expectation and the ability to adjust, the enormous home we once envisioned, now seems much too small.

So if money won’t buy us happiness what will… I spend a few minutes each day counting my blessings. Having been ill for almost two years I will admit that sometimes this works better than others, but I do try my best to spend at least five minutes thinking of things I’m grateful for. Counting your blessings seems to oppose the natural human inclination to adjust. After all, if you’re happy with what you have there is no need to look further. Also being mindful of the good things in life helps to keep you grounded, thereby keeping your expectations more closely in check.

Filed Under: Financial Frustrations, Happiness

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Hi, I'm Jewels. I am a forty-year-old wife, mother, blogger, personal finance enthusiast, optimist, former software developer and achiever of financial independence. This blog is my story. Welcome to my little corner of the Internet.

Contact: onefrugalgirl @ gmail . com

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