Money And Happiness

Money, the conventional knowledge states, does not buy happiness.  Modern psychology appears to back this up, with research studies recommending that beyond an earnings of $75,000, cash doesn’t make you any better.

This conclusion is concurrently apparent and counter-intuitive.

As an abstract concept, many us acknowledge that money does not buy happiness.  But, at the exact same time, all of us desire more of something — a nicer home, nicer holidays, the ability to live in a particular community or eat at fancier restaurants — that we believe would make us happier.  (If you’re J.D., you think possibly season tickets to your preferred team may make you happier).

So, we’re left with a quandary.  Or, rather, a series of problems:

Does income in excess of $75,000 make us better?

And if not, why not?

Money and Happiness – When Money Makes You Happier.

In answer to the very first question, I believe that all else equal — and as we’ll see below, this is a big qualifier, as things are hardly ever equal — more cash usually makes you happier.

To be clear, money won’t solve every problem.  If you’re lonely or bitter or angry, for example, more money won’t make you any better.  However simply because money doesn’t solve every problem does not suggest that cash won’t solve any problems.  A very fine line between Money And Happiness.

Money can make many things much easier, or much better.

With more money you can:

Build a nest-egg.
Payoff your house or cars and truck.
Go on more vacations and small getaways.
Have more kids.
Be a stay at home parent.
Consume better food.
Retire early.

With more money, you can do any variety of other things that people enjoy and that make them better.  And if you’re a victim of systemic poverty, more money can alter your world.

As much as we pay lip-service to the concept of cash not making us happy, it frequently does, and it’s okay to believe this.  It does not make us materialistic or greedy to desire retirement cost savings, a better home, a paid-off automobile, or a trip to Europe.

When Money Makes You Unpleasant.

Assuming that you buy the premise that (in theory) more money must (usually) make us happier, it raises the concern of why (in practice) earnings beyond $75,000 annually doesn’t make us any better.

I think the description for this seemingly irreconcilable dispute is that many people spend the extra earnings improperly.  The majority of people use cash methods that make them less happy.

Their Job Makes Them Miserable.

Individuals who earn a lot of money frequently assume that they’re paid well because of their intelligence and abilities.  And that is certainly often the case.

But typically, they’re paid well in entire (or in part) because they’ve accepted a really tough, high stress job that pays well exactly because it makes individuals unhappy!  A job with long hours, lots of stress, great deals of travel and time far from friends and family will usually pay well, however likewise considerably hinder happiness.

It shouldn’t then be unexpected that individuals with high earnings are typically unhappy.  The high earnings and distress have the precise very same origins.

They Invest Money on Things That Bring Them No Joy.

Individuals are typically conformists.  Drive through a rich area, and you’ll see people dressed similarly, driving comparable automobiles, going on similar vacations.

This isn’t simply a happy coincidence, that all these kindred spirits serendipitously discovered each other and formed a happy neighborhood.  Rather, people catch “keeping up to with the Joneses” and continually purchase stuff — not due to the fact that they enjoy it, however since they ‘d be humiliated not to have it.

To a big level, individuals let their peers determine how they spend their money and time.  Surviving on someone else’s terms — living someone else’s life — is not a recipe for happiness, and if you do it, money will not make you any happier.  You’ll be investing it how other individuals desire you to do so, not how you wish to.

They Take on More Financial obligation.

When people start to make more money, they generally update their way of life — buy a better home and purchase a better car. The problem is, they don’t pay cash for these things.  Rather, they use their brand-new, greater income as a way to obtain more credit.  Far from providing monetary security, the additional income frequently makes their financial position more precarious.

Rather than using the additional earnings to purchase flexibility and assurance — which would make them happier — they sustain more financial obligation, which makes them more stressed than ever, with the added worry that if they lose their job, they’ll be embarrassed at having to ratchet back their freshly lavish lifestyle.

Additional money won’t make you delighted if it tethers you to a heavily indebted way of life.

The Bottom Line.

The lesson here is simple: If you come into more cash, it can make you happier — provided that you utilize it in such a way that offers you security, liberty, and genuine pleasure, not merely conformist consumption.  Money, in other words, is neutral.  It’s a tool that can make you happier, or less happy, depending upon how you select to spend it.

Money will make you better only if you choose to invest it in accordance with your musts and your preferences.  Nobody — not your moms and dads, not your good friends, not your neighbors, and certainly not a blog writer — knows what makes you happy better than you do.  However, this doesn’t stop individuals from presuming that they know what is best for you: what community you must reside in, what cars and truck to drive, what education you “owe” your kids.  If you listen to them, more money won’t make you any happier; in fact, it might make you less happy, because you’re striving and sustaining debt to live out somebody else’s life.

Our household’s life is a microcosm of this.  In our twenties, my better half and I both had good jobs in a big city.  We had it made by what societal values, however we weren’t very happy, as we still worked long hours at demanding jobs.  We did nevertheless live frugally relative to our incomes.

Burnt out on our jobs, we eventually moved to a smaller city and my spouse stopped her job so that we could have 3 kids that she stayed home with.  Those were pricey choices, both in terms of cash expenses and chance expense.  However they were good choices; we had less money, but far more happiness and experiences.

This compromise was possible because we had invested several years conserving our money, delaying satisfaction — neglecting a culture that informed us to “buy” as a reward for our difficult work.  But when we finally spent the cash, we invested it on something that we valued, particularly our household.  It was the best choice that we’ve ever made (all the credit goes to my spouse), but it was possible to live that way into our thirties due to the fact that of how we had spent, or more precisely not spent, in our twenties.

The point isn’t that we’re so smart, which you ought to have a bunch of kids too.  It is in reality the reverse: I have no idea what your best life is.  However, neither does anyone else besides you.  If you find the guts to decide for yourself what you worth, and you use money wisely to pursue your goals and your dreams, you will find that, contrary to popular opinion, cash will buy you happiness.   So, as you can see Money And Happiness is a delicate balance.

Happiness also has to deal with sleep.  How much should you be getting?


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In 2009 I quit driving a truck to take care of my kids full time. I went from driving across America to building one of the largest web design companies to building affiliate sites.

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