I have written elsewhere about how, if we suffered significant childhood trauma, we are more likely to have financial difficulties in adulthood compared to those who had a more stable childhood, all else being equal. A main reason for this is that we are more likely than average to develop emotional and psychological problems which can impede progress in our chosen career.
However, does having a large amount of money actually make people happier?
A study about this, conducted by researchers at Princeton University, found that those with wealth tended to be no happier in terms of their ‘moment to moment’ experience of life than those who did not possess such wealth. The researchers concluded that: ‘the view that high income is associated with good mood is widespread but mainly illusory.’
One aspect of the study was to compare those who earned $20,000 per year with those who earned $100,000 per year. The result of this survey was that the high earners experienced bad mood states during the course of their day-to-day lives only very slightly less frequently than the low earners.
Other research has found that once a person is earning $75,000 per annum, any subsequent increase in earnings (even extreme increases) make no significant difference to the person’s happiness.
It has also been found, however, that those who don’t merely lack wealth, but actually live in a state of poverty/have very low income are more likely to feel unhappiness than the average non-poverty stricken individual. The main reasons for this are thought to be:
– increased stress, anxiety and worry (eg about paying bills, debts etc)
– lack of control in life / perceived lack of control in life
– feelings of inadequacy and failure induced by comparing selves with the financially well-off (made worse by living in a consumerist and materialistic society that tends to equate financial success with higher social status/more worth as a person)
– deprivation of dignity
– a sense of ‘missing out’ in life (irrespective of whether this ‘missing out’ is real or imagined).
As having sufficient money helps a person to avoid the the above problems, whilst money does not seem to have much effect on increasing happiness, it does appear that it can decrease unhappiness.
However, over-focusing and becoming obsessive about acquiring wealth can get in the way of enjoying the things in life which we could be enjoying without it.
Finally, further research has concluded that if we want to spend our money in ways that are most likely to benefit our psychological and emotional health we should be guided by the following findings:
– people tend to derive more satisfaction from spending money on experiences (eg going to the theatre) than on material possessions (eg buying a new watch).
– people often gain more satisfaction by spending money on others rather than on themselves
– in general, people get more satisfaction by using their time to make and solidify good relationships with others rather than using it to make superfluous money.
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David Hosier BSc Hons; MSc; PGDE(FAHE).