Does money make us happy?
It’s an age-old question, and we tend to think that money makes us happy. We believe that once we make a little bit more money, we will be a little happier in turn, too. However, according to decades of research in positive psychology, the study of happiness and human potential, the answer is no.
Why is that?
Well, it seems from research that humans are prone to something called hedonic adaptation. Hedonic adaptation means that we are very good at getting used to things – both negative and positive. This superpower comes in handy when we are confronted with terrible circumstances. But sadly, it also kicks in when we are watching the sunset the 100th time with our significant other. When we do something the first or the second time, it feels amazing. But this feeling is likely to fade, as we are quick to adapt to all great experiences.
Another example is the difference between the ecstatic feeling we get when we get into our dream university or dream job. We don’t get that feeling when we have to get up at 7:30 in the morning to get ready for work. Because we assimilate to being a student or an employee at that organization and it becomes part of our lives.
So how does this work with money?
When it comes to money, hedonic adaptation works extremely well. Once we jump a pay grade and start earning a little more, we initially think our lives are much better. However, after a few weeks, this feeling wears off. We become used to the newfound luxuries we can now afford. This then results in us wanting an even higher pay – and the cycle never ends, our thirst for money can never be satisfied. Of course this is not true for people living in poverty. But studies continuously show that above a certain level, when we can afford the necessities, more money does not equal more happiness.
How can money make us happy?
Remember that whatever you do or buy, you will get used to it. So, spend wisely! It is better to spend your money on lots of smaller things (such as eating out with your friends) rather than one big thing (like the new playstation). The one big thing is likely going to give you a similar happiness boost as one small thing – and that you can buy multiple times! And when it comes to other experiences, try to vary where and with whom you watch the sunset, and make sure that enough time passes between these experiences so that you can appreciate them each time!
Hi, I’m Bia, currently an account manager in AIESEC in Tilburg. I recently organized a training series for students around the topic of happiness, to spread the findings of positive psychology.