It is standard to equate happiness, success, and fulfillment with wealth. After all, the more money you have, the better your life will be, right? Well, that isn’t the truth.
Although financial stability plays a significant role in human well-being, it is by no means the only factor. In order to challenge this myth, let’s examine the scientific evidence.
The Myth of Money Equals Happiness
Despite popular belief, scientific research consistently shows that money does not guarantee happiness or well-being. The evidence looks like this:
Hedonic treadmill.
According to this psychology theory, money temporarily increases our happiness. However, we quickly adapt to our new financial circumstances. In other words, as our income rises, our expectations and spending also rise, leaving us feeling no better off.
As an example, for someone making $50,000 annually, a $10,000 raise is a big deal, while someone making $500,000 a year barely notices the increase. In his 2021 research paper, University of Pennsylvania professor Matthew Killingsworth notes, “Two households earning $20,000 and $60,000, respectively, [they] would be expected to exhibit the same difference in well-being as two households earning $60,000 and $180,000, respectively.”
Diminishing returns.
Daniel Kahneman and his Princeton colleague Angus Deaton, both Nobel laureates in Economics, concluded in a widely publicized study in 2010 that happiness increases with income only up to $75,000. They claimed that additional income did not affect overall happiness after that.
To be fair, Killingsworth’s study debunks this. Barbara Mellers of the University of Pennsylvania) reported in 2023 that reconciled conflicting results from the two studies.
Using a re-examination of the data, the authors concluded that more money tends to lead to more happiness for most people but not for all. “If you’re rich and miserable, more money won’t help,” said Killingsworth in a UPenn release.
Experiences over things.
It has been shown that spending money on experiences rather than things, helping others, building and deepening relationships, and hiring others to do stuff you don’t like will improve your psychological health.
The money and happiness catch-22.
Despite having more money being associated with happiness, a 2003 study by Daniel Kahneman and Ed Diener discovered that pursuing more money impairs happiness and our satisfaction. In their study, financial success goal-setters reported lower levels of happiness in family life, friendships, and jobs.
A key finding of the study was that “the greater your goal for financial success, the lower your satisfaction with family life, regardless of household income.”
The Importance of Relationships and Purpose
Money can indeed provide some level of comfort and security, but it does not determine happiness or well-being by itself. Generally, other factors are more important, like strong relationships, a sense of purpose, and personal growth.
- Social connection. Humans are naturally social creatures. To be happy and well-adjusted, we need strong relationships with our family, friends, and community. There is a study known as the Harvard Men’s Study that is regarded as one of the most important studies on well-being and social relationships. In this long-term study, 268 men entered Harvard University in 1938 and have followed them up to this day. Rather than fame or money, close relationships have kept these men going, according to the researchers.
- Purpose and meaning. In order to be motivated and to have a sense of purpose in life, we must have a sense of direction. Whether it’s from work, a hobby, volunteering, or a passion, it can come from anywhere. For instance, if you volunteer at least once a week, you will increase your happiness by $100,000, which is equivalent to earning $20,000 more yearly.
- Personal growth. In addition to keeping the mind active, continuous learning can help prevent cognitive decline. Furthermore, in addition to boosting self-esteem and confidence, it also enhances our ability to learn and acquire new skills. As an added benefit, lifelong learning can reduce stress by providing a sense of purpose and accomplishment.
The Science of Well-being
In considering their “best possible future”, people often place a high priority on income and health. As Gallup discovered, though, well-being includes more than just wealth and physical health.
Based on decades of research, they developed the Well-Being Finder. According to this tool, well-being consists of five elements:
- Career Well-Being. Work that is enjoyable and satisfying.
- Social Well-Being. Love and strong relationships.
- Financial Well-Being. An effective financial management system.
- Physical Well-Being. Energy and good health.
- Community Well-Being. Engagement with one’s living environment.
Although the specific methods to attain these elements vary across cultures and countries, they are universal. Despite factors like spirituality or personal missions motivating individuals, the ultimate goal is to enhance well-being.
Ultimately the Gallup study concludes that while health and wealth are important, fulfilling lives include a broader range of experiences.
Redefining Success
To live happier and more fulfilling lives, we must redefine success. The focus should not be solely on financial gain. But rather on factors contributing to our health and well-being. Spending more time with family and friends, pursuing hobbies, volunteering, or merely appreciating the little things might be part of this.
Let’s take a look at the latter as an example.
According to Dr. Robert Emmons, Ph.D., gratitude has many benefits. This includes the ability to increase happiness, strengthen relationships, lower anxiety, improve health, and increase resilience.
And, yes, you can be more successful financially if you’re able to bounce back quickly from setbacks like earning too little, spending too much, or handling debt thanks to being resilient.
Additionally, gratitude can assist you in overcoming negative emotions and finding solutions more quickly.
This does not mean, however, that money is not important. Life depends on financial security in many ways. Happiness, however, isn’t the only, or even the most important, factor in determining our well-being and happiness.
Taking Action
How can you prioritize well-being over wealth? The following suggestions may help:
- Cultivate relationships. Spend time with family and friends. Additionally, become a member of a club or group to meet new people.
- Find your purpose. Make time to explore your interests and passions. For example, consider volunteering for a cause that is important to you.
- Prioritize health. Take care of your health by exercising and eating a healthy diet. And, make sure you get enough sleep.
- Practice mindfulness. You may want to try meditation, yoga, or deep breathing exercises.
- Express gratitude. Keep a gratitude journal or simply take the time to appreciate what you have.
It is important to remember that true wealth is not measured in dollars and cents. We can find it in the richness of our relationships, the depth of our experiences, and the strength of our character. We can create a more meaningful and fulfilling life by directing our focus away from material possessions and towards personal growth and well-being.
FAQs
What does “money is not the only answer” mean?
Although money plays a significant role in many aspects of life, it’s not the sole factor that determines happiness, success, or fulfillment. Relationships, health, personal growth, and purpose are also important factors.
What are some examples of areas where money is not the primary solution?
- Relationships. Financial status is often less important than strong bonds, trust, and communication.
- Health. Your physical and mental well-being cannot be measured in dollars.
- Personal growth. Life quality can be enhanced more by learning, experiences, and self-discovery than by material possessions.
- Purpose. It is often more important to find meaning and contribution in life than what’s in your bank account.
How can I find a balance between financial goals and other life priorities?
- Setting clear goals. Make a list of what really matters to you, both personally and financially.
- Creating a budget. Make sure you allocate funds for necessities, savings, and experiences.
- Time management. Identify activities that align with your values and prioritize them.
- Mindfulness. Consider how your spending habits affect your overall health.
Is it possible to be happy without a lot of money?
Absolutely.
A person’s level of happiness depends on a variety of factors. It is common for people to find joy in simple pleasures, strong relationships, and personal accomplishments
How can I overcome societal pressures to prioritize money?
- Questioning societal norms. Don’t let other people’s expectations dictate what matters to you.
- Building a support system. Identify people who share your values and surround yourself with them.
- Practicing gratitude. Don’t focus on what you lack, but on what you have.
What if I’m struggling financially while pursuing other passions?
- Exploring alternative income sources. Try part-time work, freelancing, or side hustles.
- Seeking financial advice. To create a budget and manage debts, consult with professionals.
- Building resilience. To cope with financial stress, develop coping mechanisms. Budgeting, for example, can help you manage your expenses more effectively. Furthermore, practicing mindfulness and stress-reduction techniques can improve mental well-being during challenging times.
Image Credit: manu mangalassery; Pexels
