Most of the beliefs we currently have were passed on to us by our parents, our teachers and society. While some of them are based on facts and are good for us, some are also based on myths and may not help us live the great lives we desire.
For example, we all know that it’s a good idea to respect other people, to obey the law and to pay your taxes. I believe in all of these too and living by these “rules” can make our lives easier and more enjoyable.
But other beliefs are simply sending us on a wild-goose chase for most of our lives. One of these beliefs is the idea that money can buy happiness. Almost anyone in our society believes that money are necessary for happiness. We all seem to know that once we have a lot of money (as much as possible), we will definitely be happier. But that is actually a myth. And science has proven this times and times again.
Other popular “prerequisites” for happiness are a big house, an expensive car, a great career and a beautiful body. Well, these are other things that won’t really bring you the happiness you desperately search for! I’ll explain why and encourage you to reconsider what you really need to be happier.
Can money buy happiness?
The most popular myth about happiness is probably “money buys happiness”. People that are poor, average or rich all claim that money “creates” happiness. And, to a certain extent, that is true. If you are homeless or really poor, earning some or more money will contribute to your life satisfaction. But money correlates with happiness only up to a certain point. Once the gross domestic product of the country is more than $8,000 per person, money no longer corelates with life satisfaction.1
Despite that, when it comes to money, it seems that the more people have, the more they want to have.
According to a study called The American Freshman Survey, 71% of the people that responded in 2015 said that being “very well of financially” was very important. And the more money they earned, the more money they wanted to earn. The people that had an annual salary under $30,000 believed that $50,000 would make them much happier. The ones that earned more than $100,000 a year thought that they would be satisfied earning $250,000.2
But statistics show that more money does not mean more happiness. For example, some of the wealthiest Americans, in this case those who earn more than 10 million dollars per year are only slightly happier than the people that work for them.2 And despite what you may believe, money and materialism are not associated with happiness. On the contrary, materialism is a good predictor of unhappiness. And materialists are more prone to several mental disorders than the people who are not materialists.2
Even the wealthiest people, the ones that are included in the Forbes 100 and are worth more than 125 million dollars are just a bit happier than regular Americans.1
But why does money make such a small difference?
I believe that the answer to this question lies mostly in the set point theory. It turns out that we, people, have a happiness set point. 2 According to Sonja Lyubomirsky, a psychology professor, this set point represents how much happiness we normally experience throughout our lives.
Let’s say that we can measure happiness using a scale from 1 to 10. If you are at 1, it means that you are very miserable and dissatisfied with your life. If you are at 10, your life is an amazing experience that brings you a great deal of joy. Maybe your happiness set point is at 6, so you feel quite satisfied with your life, but there is also room for improvement. You would not describe yourself as happy or exhilarated. If your happiness set point is 6 (or 4 or 9), this is the happiness level you will probably experience throughout your life.
The set point is genetically determined, so it is stable. You cannot change or influence it.2 Other psychologists, like Martin Seligman, the founder of positive psychology, also support this theory. However, in his book “Authentic Happiness”, Seligman talks about a set range, not a set point.1
According to this theory, any events will only have a temporary effect on our happiness level. And this is true even if we talk about major life events such as winning the lottery, losing your legs, getting married, getting divorced, getting a bigger house or moving to a bigger city.2,3
Of course, such events will have an effect on you. Once you get married and get a promotion, you will feel happier. If you start earning much more money and you buy a bigger house, moving in will make you happier. However, after some time, you get used to the new situation. And gradually you will go back to your normal happiness level.2
In a way, the happiness set point is like gravity.
You can pick up an object and throw it up in the air, but it will not stay there. In a few moments, the gravitational force will pull that object back to the ground. Similarly, a positive event will make your happiness level go above your set point. But you will inevitably go back to it. As the moon cannot stop gravitating the Earth, you cannot stop going back to your happiness set point.
This is the reason why earning more money, getting promoted at work, having a skinnier body, owning a bigger house is not the way to become happy. These things will only make you happy for a short time and then their effects will wear off.2
And do not think that all these things can make you much happier either. All these circumstances combined can make us only about 10% happier. If you had the ideal salary, home, body, health, age and career, you will only be slightly happier than the people who don’t have them.1,2
Imagine having everything you want: more money, an expensive car, a big home, an attractive body, a great career and so on. And now remember that all these things will only make you slightly happier for little time.
So why do we all believe that money makes us happier?
There are many reasons why we believe this myth. I’ll explore the most important I could think of.
1. Society tells us that money will make us happy
I think that there are few myths that are so ingrained in our culture. You can notice that this idea is promoted by all social classes – the rich, the middle class and the poor. All of them think that money is the thing that makes life much better. And, surprisingly, this idea is accepted by almost every nation on Earth. It is a predominant belief in developed, Western countries and all developing or poor countries look up to the nations and people that have more.
As you were growing up, you were probably taught to believe that money is a great goal since they definitely contribute to happiness or success. You parents probably told you that you have to go to school, get good grades so that you can get a decent job and make a lot of money. That was the end goal, right? Unfortunately society seems to be oblivious to the data and expertise of psychologists that tells us how little money can contribute to happiness.
2. Money and the things bought with money are nice to have
If you had to choose between being poor and homeless and being rich and having a big home, what would you choose? I bet 100% of you would choose the money and the good things money can buy. We can all agree that having a home and money for food is great. Spending money on gourmet food, designer clothes, fast cars and luxurious vacations sounds great, right? But all that glamour and the momentary pleasure these things can bring will not ultimately make us happier. In fact, they can make us less happy.
3. We overestimate how happy anything can make us
According to Daniel Gilbert, a Harvard professor, we tend to overestimate the impact of future events. In his book “Stumbling on Happiness” he tells us that we overestimate how much happy or unhappy a single event can make us.4
“We make decisions about whom to marry, where to work, when to reproduce, where to retire, and we base these decisions in large measure on our beliefs about how it would feel if this event happened but that one didn’t. Our lives may not always turn out as we wish or as we plan, but we are confident that if they had, then our happiness would have been unbounded and our sorrows thin and fleeting.” - Daniel Gilbert, “Stumbling on Happiness”
We think we know that money will definitely make us happier, but according to Gilbert, this is just an illusion. Everybody around us may believe it is true, but that will still be an illusion.
Now I did not write this article to persuade you to sell all your possessions and live on the street. I also did not write it to tell you to stop earning money. You have the right to chase money all your life. However, I want you to also consider what the data and many psychologists tell us.
Also, if you decide to pursue money, keep in mind that much of your happiness will probably come from that pursuit and from the fact that you have achieved your goal, not necessarily from the money itself.
“How important money is to you, more than money itself, influences your happiness.” Martin Seligman, “Authentic Happiness”
Although it is true that money cannot make us much happier, there are things we can do to live a better life. In my book, "Happy by Choice", I describe techniques you can use to manage your negativity and increase your happiness without relying on material or superficial things.
Living a satisfying and fulfilling life is possible and it is up to you. While I cannot create that life for you, I can help you take the first steps in that direction. You can buy the book here!
- “Authentic Happiness” – Martin Seligman
- “The How of Happiness” – Sonja Lyubomirsky
- “The surprising science of happiness” TED talk – Daniel Gilbert https://www.youtube.com/watch?v=4q1dgn_C0AU
- “Stumbling on Happiness” – Daniel Gilbert