Can Money Buy Happiness?

08/13/2010

I read an interesting article from the American Bar Association that I thought I would share with you. 

The premise is can money buy happiness?

According to the article, it all depends on how well-off you consider yourself, and how you spend the cash.

The article states that once you make more than about $50,000 a year, there’s little relationship between income and satisfaction, according to University of Missouri law professors Nancy Levit and Douglas Linder. Instead, they say, the key is “the joy of downward comparison.”

What this means is that people are more content when they frame their success in terms of how well off they are when compared with others. The writers explain what they mean by using an example plucked from Olympic research. They found that bronze medalists report more happiness than silver medalists, because the third-place winners are just happy to be on the winner’s podium. Silver medalists, on the other hand, compare themselves to the gold medal winners, and they are less happy, presumably because they were just one step away from the gold.

The article outlines other factors that help boost happiness, including having some control over your life, stable relationships, congruence between values and work, job security, and work-life balance.

The New York Times recently turned to the subject of how spending money influences happiness. According to the newspaper, new research shows that “people are happier when they spend money on experiences instead of material objects, when they relish what they plan to buy long before they buy it, and when they stop trying to outdo the Joneses.”

A University of Wisconsin professor, Thomas DeLeire, studied nine categories of consumption and found only one had a positive effect on happiness: vacations, entertainment, sports and equipment like golf clubs and fishing poles. The conclusion, if you agree, is that spending on leisure and services tends to strengthen social bonds, which in turn makes people happier.

To me, this article and the research makes some sense.  Life is short and you have to enjoy it while you can.  I hope at least reading my blog makes you happy.  If it does, come back soon.