It's only money. Really.
If you're reading this column, you are no doubt looking to get
ahead financially. But don't kid yourself: All those extra dollars won't make
you extra happy.
In recent years, economists and psychologists have turned their
attention to "happiness research" -- and the results are a little disturbing if
your life's goals are a bigger paycheck and a fatter nest egg. Money alone, it
seems, just doesn't buy a whole lot of happiness.
• It's all relative. To be sure, high-income
earners often express greater satisfaction with their lives. In a 2004 survey,
43% of those with family incomes of $90,000 or more reported being "very
happy," versus 22% for those with incomes below $20,000.
But the truth, it seems, is messier than such surveys suggest.
Yes, if you live in poverty, more money can bolster your happiness.
"But once you're safe and warm and fed, it makes surprisingly
little difference," says David Schkade, professor of management at the
University of California at San Diego. "Once you get to the lower-middle class,
then it takes a lot of income to make a difference. Income does matter, just not
as much as people think."
Indeed, despite rising standards of living, just 30% of
Americans described themselves as "very happy" in the late 1990s, down from 34%
in the early 1970s, according to a study by economics professors David
Blanchflower and Andrew Oswald that appeared in the Journal of Public Economics
in July 2004.
Faced with this sort of data, researchers have speculated that
our happiness is influenced not by our absolute level of wealth and income, but
rather by how our financial situation compares with friends and colleagues.
This may help explain why so many high-income earners describe
themselves as "very happy." Much of the time, these folks aren't necessarily all
that cheerful. But when asked in surveys to assess their satisfaction with their
lives, they think about their standing in the world -- and that prompts them to
say they are happy.
• On the clock. What happens when high-income
earners aren't contemplating their position in the financial pecking order?
Consider a June 30 article in Science magazine by Daniel Kahneman, Alan
Krueger, Norbert Schwarz, Arthur Stone and Prof. Schkade.
The five professors analyzed data for 374 workers who were
asked every 25 minutes during the workday about the intensity of various
feelings. Those with higher incomes didn't report being any happier, but they
were more likely to say they were anxious or angry.
The five professors also studied government data detailing how
folks divvy up their waking hours. They found that people with higher incomes
tend to spend more time working, commuting and engaging in obligatory nonwork
activities, such as maintaining their homes. All of these are associated with
lower happiness.
"People who are richer aren't having a better time," Prof.
Schkade concludes. "But if you ask them about their lives, they report being a
little more satisfied" than those who are less affluent.
• Buying time. This raises the question: If
more money won't make us much happier, what will? Here are four pointers.
• Keep your commute short. Tempted to use your
latest pay raise to buy a big house in a distant suburb? Don't do it.
While we often adjust amazingly well to life's hardships,
commuting is an exception. "You can't adapt to commuting, because it's entirely
unpredictable," says Daniel Gilbert, author of "Stumbling on Happiness" and a
psychology professor at Harvard University. "Driving in traffic is a different
kind of hell every day."
• Choose time over money. Cutting back the hours you
work will likely leave you happier, even if it means less pay.
What about the fall in your standard of living? It may hurt
less than you imagine. True, you are thrilled when you buy a new car. Soon
enough, however, the good feelings fade and you're taking the new car for
granted. Academics call this "hedonic adaptation."
• Think carefully about how you spend your dollars.
While a new car may not boost your happiness for long, maybe a trip to Europe
would.
"Money itself doesn't make you happy," Prof. Gilbert says.
"What can make you happy is what you do with it. There's a lot of data that
suggests experiences are better than durable goods."
The car might seem like the better purchase, because it has
lasting value. But, in fact, it sits in the driveway, slowly deteriorating.
"Experiences don't hang around long enough to disappoint you," Prof. Gilbert
says. "What you have left are wonderful memories."
• Use your leisure time wisely. Surveys show that
leisure is better for your happiness than work. But much also depends on how
you spend your leisure time.
Passive activities like watching television usually don't make
folks as happy as eating. A good meal, in turn, doesn't rank quite as highly as
active leisure activities, such as socializing with friends.
"Going to a dinner at a nice restaurant, where you're going to
see friends and eat good food, is one of the best combinations," Prof. Schkade
says. "The French know what they're doing, when it comes to how to enjoy a good
meal."
