From Sonja Lubomirsky’s book “Myths of Happiness”
Will a Higher Income Make you Happier? Or is This a Myth?
Once your income is enough to meet your basic needs (such as food, shelter, and health care), having a higher income will not have much effect on your overall happiness.
- “The bottom line from the hundreds of studies on the subject is that having money can make us happy, and not having it can definitely make us unhappy, but the power of money is a great deal less than we’d expect.” (p. 149)
- “Americans have not gotten happier as their incomes have tripled.” (p. 148)
- “when people are asked how happy they are moment to moment in their daily lives—e.g., “How joyful, stressed, angry, affectionate, and sad were you yesterday?”—then those with more money are hardly more likely to have experienced happy feelings.”
“This pattern of results suggests that wealth makes us happy when we are thinking about our lives (“Am I happy overall? Well, I’m making a good living”), but money has a much smaller impact on our feelings as we actually live our lives (“Am I happy today?”). (p. 145)
Why is This?
- Hedonic Adaptation. Humans adapt to almost everything, including nice cars, big houses, luxury items, and other material items. When you buy these things will feel happier, but it doesn’t last too long. You will adapt to these things and may not even notice them!
- The stress and responsibilities from making more money, often outweighs the benefits of making more money. Spending more time at work prevents you from spending quality time for social connections. Time affluence and good social connections have been shown to be a better predictor of happiness than money.
- Social Comparisons. Once you start to make a higher income, you may associate yourself with other people who make a higher income. If you start comparing yourself to these people, you won’t be happier.
“higher incomes force a shift in our social comparisons, such that we now feel poorer relative to the people in our neighborhoods and offices who have a bit more than we do.” (p. 148)
Examples:
- “Living in a bigger house with a bigger backyard gives us pleasure, but this pleasure diminishes over time until we barely notice the square-footage or the updated bathrooms. More critical is the fact that our pleasure from the house can’t come close to matching the pain and worry of eking out monthly mortgage payments. Shifting from being house-poor to being house-rich means less daily stress and more moment-to-moment happiness.” (p. 151)
- “One answer is that as income rises beyond a certain level, its positive effects (for example, the ability to fly first class or retain top-notch medical specialists) may be offset by some negative effects, like increased time pressure (longer working hours and commutes) and increased stress (from holding powerful positions, feeling anxiety about investments, and problems with overindulged children). Because wealth allows people to experience the best that life has to offer, it can even reduce their capacity to savor life’s small pleasures.” (p. 147)
- “the pursuit of money and reputation redirects our energies and passions away from deeper and more meaningful social connections and growth experiences and prevent us from achieving our full potentials.” (p. 172)
- “As we spend more of our time making money, the opportunity “costs” of reading poetry, playing catch with our child, or taking a walk with a friend become so high that it becomes “irrational” to do such things. All the more reason to learn what research has to say about how to avoid the excesses of consumption and materialism and spend money in ways that make us happy.” (p. 172)
- “economists have found that two-thirds of the benefits of a raise in income are erased after just one year, in part because our spending and new “needs” rise alongside it and because we begin to associate with people in a higher income bracket.” (p. 168)
- “In the beginning, greater wealth brings us a higher standard of living, and the extra comforts and extravagances bring extra pleasure. Then, we get used to—and perhaps even “addicted” to—the higher standard of living, to the extent that we are not satisfied unless we up the dosage by acquiring even more.” (p. 169)
- “what our peers are making determines our happiness even more than what we are making, not matter how generous it is. In other words, the average person (though, as we learned earlier, not the happiest one) cares more about social comparison, about status, about rank, and about so-called positional goods than about the absolute value of his bank account or reputation.” (p.168)
- “Our fantasies about our first million or the dream beach house are almost never as thrilling in reality as they are in our imaginations, and even when they are, they don’t retain their rush of pleasure for very long.” (p. 166)
More Good Quotes About Money and Happiness:
“That is, when our basic needs for adequate food, safety, health care, and shelter aren’t met, an increase in income makes a much larger difference for us than when we are relatively comfortable. Another way to put it is that money makes us happier if it keeps us from being poor. After all, those of us who have very little are more likely to be evicted from our homes, go hungry, live in a crime-ridden community, have a child drop out of school, lack the resources to obtain medical care, or be unable to manage the pain, stress, and practical demands of a disease or disability. Even a modest increase in income can alleviate or prevent some of these adverse situations.” (p. 147)
“higher incomes foster higher aspirations, such that we now consider necessary—a vacation, a car, or indoor plumbing—what we once considered extravagant or optional. And, second, higher incomes force a shift in our social comparisons, such that we now feel poorer relative to the people in our neighborhoods and offices who have a bit more than we do.” (p. 148)