Money, we love it. Happiness, we want it. That much we know. What we don’t know, and what reams of research have yet to show definitively, is whether having one really yields the other.
A recent symposium of psychology researchers, called Happy Money 2.0: New Insights Into the Relationship Between Money and Well-Being, has again attempted to uncover an answer. The choice of the term “well-being” is important, because it’s a bit more exacting than the big, broad idea of “happiness.” Well-being in psych parlance can either be “psychological well-being”—which is measured using scales, in the same way that depression can be measured in the other direction. Or it can be “subjective well-being” (sometimes called hedonic well-being), which is the sense of satisfaction we feel with our lives moment-to-moment. When it comes to measuring happiness, both definitions of well-being are important; one can be tracked by the numbers, the other discloses our gut.
Does Buying Experiences Makes Us Happier Than Buying Stuff?
In the latest volley of studies, researchers tackled a handful of major themes linking money and happiness. The first of these goes like this: “Does spending money on experiences yield more happiness than spending on things?” The question has been the center of a few worthwhile studies telling us that, in general, investing in experience will provide more happiness than buying more stuff. The latest study discussed at the symposium reinforced that conclusion, adding that the real magic in experiential purchases is anticipation.
“The anticipatory period [for experiential purchases] tends to be more pleasant…less tinged with impatience relative to future material purchases we’re planning on making,” according to lead study author Amit Kumar, PhD candidate in psychology at Cornell.
The study specifically focused on the “mood” consequences of spending decisions. Investing in an experience (vacation, concert, etc.) that will take place in a few months, contributes to a more upbeat mood than laying down cash for something we have to wait for to receive sooner (like ordering a new smartphone), according to the research. The takeaway message is that building more waiting time into experience purchases will let you squeeze as much anticipatory happiness as possible from the investment.
Does Having More Money Make Us Enjoy Things Less?
Another theme explored was whether having more money results in a happiness debit when it comes to enjoying every day experiences. This is the perennial question of scarcity—if we have less, do the little things matter more? The question can also be thought of in terms of how we think about how much or how little we have, since scarcity (just like wealth) is a relative term.
The latest studies have added to the chorus that dwelling on how much we have lessens our enjoyment of future experiences. This may be because when we think we’re well off, a sense of complacency settles in that makes everything seem a bit dull.
The way out of this trap, according to lead study author Jodri Quoidbach, is to remind oneself of the uncertainty of life that’s there regardless of how much money and things we possess. ”Simply reminding individuals that the future can be unpredictable drives people to stop and smell the roses,” adds Quoidbach.
Does Adding Money to Money Increase Happiness?
A final theme at the symposium focused on the oft repeated question, “How much money is enough?” Upcoming research on this theme suggests that, at least as far as wealthy people are concerned, having more money is essential to increasing happiness – but this assumption doesn’t pan out in practice.
The research is being led by Harvard professor Michael Norton, whose book, “Happy Money: The Science of Smarter Spending” lays out a sort of roadmap to buying happiness using principles of smart spending. But Norton’s research also indicates that the assumption people make about more money leading to more happiness is simply wrong. “Wealthy individuals–whether worth $1 million or $10 million–are not happier as their wealth increases,” according to Norton. In fact, it’s possible that adding money to money may actually lead to experiencing less happiness.
The grand takeaway from this symposium is that money may not directly buy happiness, but it’s certainly part of the equation. Just how big a part remains an open question that has much to do with someone’s particular life situation and perspective. More to come on all of the above in future research, no doubt.
You can find David DiSalvo on Twitter @neuronarrative and at his website daviddisalvo.org.
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