Does money really make you happy?

By |2018-11-05T19:45:44+00:00July 26th, 2018|

Financial concerns dominate our everyday life, but is human contentment and well‐being influenced by money?

Financial concerns are very important aspects in everyday life and the pursuit of higher income and more wealth takes a central place in the lives of many people. Individuals spend a large amount of their time either earning or spending money in the hope that this will increase their contentment and well-being. So, what exactly is “Happiness”? This definition I found, sums it up very nicely: “Happiness can be defined as the degree to which a person judges the overall quality of life in a favourable way”.

Let’s look at what research from the past 25 years tells us about the connection between money and happiness:

Firstly, and no surprise maybe, people in richer nations are happier than people in poorer nations.

Secondly, which does come as a surprise, increases in national wealth in developed countries is not significantly related to increases in happiness of its population, and similarly, increased personal wealth does not usually result in increased happiness. It has been shown though, if you win the lottery or receive an inheritance, you will feel happier for a period of time, which then levels off again once the initial excitement has worn off.

And lastly, individuals who strive deliberately for wealth and money are unhappier than those who don’t.

So, what can we learn from this research? It appears that money does make you happy to a point where your basic needs, such as food, shelter and basic material needs are met, however there is a diminishing effect of wealth on happiness beyond a point after that. For example, studies which looked at happiness of the 100 wealthiest Americans as per Forbes found, that the majority were only slightly happier than the rest of Americans. I know, it’s hard to believe, but It appears, that once basic material needs are met, your happiness does not increase long-term with more money.

So, if money only makes you happy to a certain point, and once your basic needs are met an increase in money won’t make you any happier, the question then is “what can make you happy and increase your overall well-being?”

Again, looking towards research, it comes as no surprise that strong ties to friends and family and being part of a community increases your level of happiness and reduces depression. This is good news if you are low on the happiness scale, as you can raise your level significantly by interacting with friends, family and your community on a daily basis.

There are also many simple steps that you can take that have been shown to increase your psychological well-being and happiness.

For example, keeping a gratitude journal has been proven time and time again to have a positive effect on your mental state and overall well-being. You simply write down 3 things you are grateful for and why. Try and do this every day and within a very short period of time you will start noticing a difference in how you feel.

Writing a letter or email to someone who did something nice for you is another tool you can apply to increase your happiness as is cultivating kindness. Volunteering or simply caring for others on a consistent basis has been shown to increase mood and well-being. You can volunteer as part of an organised group or club, or you can simply reach out to a colleague or friend who looks lonely or is struggling with an issue.

Eating well and exercising will have a huge impact in how you feel. At the end of the day, the fuel you give your body will determine how it performs and feels. Forgiveness and practicing mindfulness will help with your mood and produce greater positive emotions.

Finally, your mindset – your thoughts are linked to how you feel. If you are focusing on the glass as being half empty you will experience more negative emotions than someone who looks at the glass as half full. We know now from neuroscience that you can retrain your brain. This means you can train your brain and look at the world around you through a different lens.

I work with people helping them retrain their brain by looking at their automatic thoughts, attitudes and core beliefs which are formed during your formative years. You can change them and challenge them and find a mindset that will bring you well-being.

I would love to hear your thoughts on the topic and get some feedback on any of my social media platforms.

About the Author:

Cognitive Behaviour Therapist

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