Pressing Pause Podcast episode 36 Money can buy you happiness
Welcome to Pressing Pause, the podcast for overthinkers.
I’m Gabrielle Treanor and I’m here to share with you ideas, inspiration and actions to empower you to spend less time overthinking and worrying and more time enjoying your life.
Welcome to episode 36. Before we get stuck into this week’s episode I wanted to tell you about a free resource I’ve made for you. It’s a free workbook that gives you the opportunity to think more deeply about your life – how you feel about it now and the vision you have for the future. And to take the first step towards the lighter, calmer, freer, more joyful life you want. To download your free workbook follow the link in the show notes or go to gabrielletreanor.com.
Now, as Christmas is only a few weeks away and this is a time of year when we can be thinking a lot about money – how much we do or don’t have, how much we’re spending and on what – I thought I’d look at the topic of money and how it contributes to happiness in this episode.
The relationship between money and happiness is complicated. One belief is that the more money you have the happier you will be. And that’s true to an extent. Money is vital for ensuring your basic needs are being met and financial security is a goal for many people for good reason.
However, the idea that the more money you have the happier you will be is only true up to a certain figure. £58,000 or $75,000 to be specific. A study carried out by Angus Deaton and Daniel Kahnemann of Princeton University’s Woodrow Wilson School, involved them analysing 450,000 responses from 1,000 US residents. They found that it doesn’t matter how much more income your household has above £58,000 your emotional wellbeing doesn’t increase. But your life satisfaction does. What this means is that the more money you have the better you think your life is, but how you feel on a day to day basis can’t be improved by having more money. So while you might think your life is going well, it doesn’t make you feel any cheerier as you go about ordinary life.
What about the joy you feel when you buy the thing you’ve been thinking about, looking forward to and saving towards for ages? There’s no mistaking the exhilarated feeling you have when you finally getting the car of your dreams or the high definition flatscreen TV or whatever the thing is. That initial joy is real and can give your base happiness level a bump up but it doesn’t stay up there. Over time you become accustomed to a new belonging, you get used to it and this is known as hedonic adaptation. It becomes a part of your life and the initial burst of joy you felt fades over time.
Because it feels so good to have that pleasurable feeling, and you miss it when it goes, you look around to see what the next ‘thing’ is that can make you feel that happy again. You hop back on the hedonic treadmill in pursuit of what you can buy next that will make everything better and you’ll feel happy again. You buy it, you feel immense joy, in time that fades and you’re back to square one. And on it goes. This happiness hamster wheel won’t provide you with the long-lasting, far-reaching contentment and joy that you really want. And I talk more about this in episode 21 if you want to have a listen.
So, how do you need to spend your money to feel happy if not on things?
Well, humans are sociable creatures and what feeds our happiness above all else is connecting with other people. Spending money to enable you to connect with others is more likely to make you feel good than buying things.
You can buy time with people. That doesn’t mean paying the person you spend time with, it means spending money on creating more time in your life. So instead of spending your own time on something you don’t want to do, or that doesn’t need you specifically to do it, like cleaning your home for example, pay a cleaner so you can spend your time doing what you want with the people you care about.
Now there can be resistance around paying another person for tasks such as cleaning, gardening or ironing because of beliefs that it suggests you’re lazy or privileged. And, of course, there’s a level of privilege that comes with having money to spend. So what ways are there to spend that money responsibly? When you pay someone to clean your house or mow your lawn you’re supporting an individual (who in turn could have a family to support) with their own ambitions and dreams. Your money is going into the personal, local economy, not to a faceless global corporation.
Spending money on other people has been shown to increase how happy you feel. Michael Norton is a social science researcher, and a professor at Harvard Business School, and his TEDx talk, How to Buy Happiness, has been watched more than 3.8 million times. I’ll link to it in the show notes. In the talk he shares his extensive research where he gave people money to spend on themselves or on others. Time after time the result was that people felt happier when they spent the money on another person rather than themselves. He also found that you don’t have to spend a lot or do anything particularly momentous with it. What matters is that you are choosing to spend your money on someone else. Michael and his colleagues also looked at Gallup poll data and found a direct correlation between donating to charity and feeling happy.
Think about how you feel when you spend money on other people, whether it’s buying Christmas presents for friends or family or dropping coins into a charity collection box.
Spending money on experiences can be another way to create happiness. In a study by Leonardo Nicolao, Julie Irwin and Joseph Goodman participants were given money to make either an experiential purchase or a material purchase (and both times they had a choice of seven). They were asked how happy their purchase made them immediately afterwards and seven minutes, one day, two days, seven days and 14 days later. The happiness rating fell over time more steeply for the material than for the experiential purchase showing that the happiness we feel from an experience we have lasts longer than from an item we own.
There’s a lot to savour about an experience – you anticipate it, enjoy and perhaps share the experience with others as it’s happening, and you reminisce about it afterwards. Psychology Professor Thomas Gilovich from Cornell University says: ‘People often think spending money on an experience is not as wise an investment as spending it on a material possession. They think the experience will come and go in a flash, and they'll be left with little compared to owning an item. But in reality we remember experiences long afterward, while we soon become used to our possessions.’
So, spending money isn’t guaranteed to make you happy and spending so much on Christmas presents that you get yourself into debt certainly isn’t going to make you feel joyful. However, using money to have memorable experiences, to donate to charity, to spend on other people, to buy time for yourself to pursue what you enjoy, or to spend time with those you care about, can be a way to create and feel more happiness in your day to day life.
As always I would love to know what you take from this episode so do drop me a line at firstname.lastname@example.org or you can find me on Instagram as @gabrielletreanor.
If you enjoy Pressing Pause it would mean a huge amount to me if you could leave a review on iTunes because it helps other people find the podcast too.
Thanks for listening, until next time, lovely people.