People are crazy about money. We spend an average of 90,000 hours during our lifetimes earning it, and the rest of our time spending it. Nearly everything we do requires money, from paying the rent and putting food on our tables, to vacation travel and buying those new shoes we've been eyeing.
There's no doubt that money is an important force in our psychological lives. It’s one of the most common issues couples fight about , as well as a major factor in divorce. It’s a frequent reason people seek to switch jobs , and it's the top consideration influencing which jobs they ultimately accept .
Given all this fuss, it’s interesting that most people say they believe the old saying “Money doesn't buy happiness,” at least according to one informal poll .
So which is it? Is money an important facet of our psychological well-being or not? According to research, the answer is “both.”
Dozens of studies show that money does indeed by happiness. In a recent article published in the journal Nature , for instance, researchers analyzed data on income and well-being from the Gallup World Poll, a representative survey of more than 1.7 million people worldwide. Perhaps not surprisingly, they found that the higher income people reported, the happier they were.
But this was only true to a point. In the same study, emotional well-being stopped increasing once earnings reached $60,000 to $75,000 on average, and people indicated that they were maximally satisfied with their lives once income reached around $95,000. Although these numbers differed from country to country, there was always a point at which more money no longer yielded more happiness.
"Always end the name of your child with a vowel, so that when you yell, the name will carry." - Bill Cosby
But let’s not pretend that money is unimportant—there are plenty of people in our world who don’t have enough money to survive. It gives us the ability to put a roof over our heads, access education, provide safety and security to our families, obtain healthcare, and enjoy our leisure time. But none of this requires a greedy quest for millions of dollars. Provided we’re lucky enough to earn sufficient funds that we no longer need to worry about food, health, and safety, the positive psychological effect of making ever increasing amounts of money levels off, particularly if it means more job stress or longer hours.
Winning the lottery may not even make people happier. In a classic study , researchers interviewed almost 200 people who had won a major lottery approximately a year earlier, as well as a group of people who hadn’t. Tellingly, the lottery winners didn’t report being any happier than the non-winners. The positive emotions that existed soon after the win had quickly diminished. In addition, the two groups were asked to rate the degree of pleasure they felt while doing everyday activities like talking with friends, watching TV, or buying clothes. The results were startling: The lottery winners enjoyed these activities less than those who hadn’t won. Apparently, winning the lottery had set an impossibly high bar, compared to which ordinary pleasures just seemed less pleasurable. As the late great rapper Notorious B.I.G. aptly observed, “ mo’ money, mo’ problems ," or at lease “mo’money, not necessarily more happiness.”
There are a couple of important exceptions to this rule, however. According to research, making more money can lead to greater happiness when it’s used to purchase experiences or to benefit others (or both). Using money in this way buys lasting memories. Most of us would agree that our happiest moments are spent with friends and family, traveling or eating meals together, for instance. Whereas the pleasure of buying a high-ticket item wears off, the increase in well-being we gain from these kinds of activities sticks with us. Long after we’ve thrown our latest smartphone in the garbage, we’ll still be reliving the memories of that trip to the beach we took with our kids. This happiness doesn’t flow from the money itself, of course, but from the experiences it helps us access. Thankfully, many positive experiences don’t require vast sums of cash, and these can make us happy, too.
Sarah Jessica Parker (mom to three son James and twin daughters Marion and Tabitha): “As a working mother high heels don’t really fit into my life anymore - but in a totally wonderful way. I would much rather think about my son than myself.”
So if simply accumulating mountains of money isn't the key to emotional well-being, why do so many people still try to do it?
The great cultural anthropologist Earnest Becker provides a fascinating, if slighlty complex, answer to this question. He believes that money is closely tied to a quest for ultimate control over our destinies—even over death itself.
Becker observed that we human beings are the only animals with the capacity to realize we will eventually die. We might live to be 80 or 90, though it’s also possible we could die tomorrow, next week, or next month. Even if we’re fortunate enough to have access to excellent healthcare, we don’t actually have much control over this incredibly important eventuality. If we really stopped to think about it, this could truly terrify us. Many of us catch glimmers of this feeling at some point in our lives—the clichéd mid-life crisis, for instance, or cold feet right before our wedding. We know we only get one shot at life, and time is running out.
Fortunately, we don’t usually walk around thinking such morbid thoughts. According to Becker and psychologists who have built on his ideas , that’s because we’ve developed psychological mechanisms that give us an inflated sense of control over our fate. One of them is money .
In his book, Escape from Evil , Becker writes that money “buys bodyguards, bullet-proof glass, and better medical care. In addition, it can be passed on, and so radiates its powers even after death, giving one a semblance of immortality.” Money gives us control over a lot of things in our lives, so Becker theorizes that the accumulation of wealth may also confer a false sense of security when it comes to our own impending deaths.
If this sounds far-fetched, consider the message that President George W. Bush delivered after the September 11th attacks, perhaps the American people’s most significant confrontation with death in recent history. You might expect the president to encourage people to care for one another or to keep faith in their government. It might seem surprising, however, that he would urge them to shop. “We cannot let the terrorists achieve the objective of frightening our nation to the point where we don’t do business, where people don’t shop,” urged President Bush . “Mrs. Bush and I want to encourage Americans to go out shopping.” And that’s exactly what Americans did, generating an increase in consumer spending of more than 6 percent from October to December of 2001, the strongest in years.
"Life affords no greater responsibility, no greater privilege, than the raising of the next generation."- C. Everett Koop
Research also supports Becker’s account of why we care so much about money. In one study , experimenters asked college students to project their financial standing 15 years into the future, taking a guess at things like their salary, the value of their homes, and the amount of money they would like spend on leisure activities. Just before they answered this question, however, researchers asked half the students to write a paragraph about their thoughts and feelings regarding their own eventual deaths. The results were exactly what Becker would expect: The students who wrote about their deaths subsequently said they wanted to be worth more financially than those who hadn’t been encouraged to consider their mortality.
Although none of the students consciously realized it, they may have been using their plans regarding their wealth to defend against the unpleasant feelings generated by writing about their deaths. The unconscious logic goes something like this: “If I’m rich, I don’t have to worry about it.” Money may be a way of tricking ourselves into thinking that we have control when we really don’t.
Of course, this is ultimately an illusion. While the comfort of using this mental strategy may have its advantages, whether we like it or not, earning more money won’t shortcut death. Beyond a certain point, it probably won’t make us any happier, either.
Perhaps the most important lesson in all of this research is that money clearly matters, but it shouldn’t be the center of our lives. Once we have enough money to survive and feel comfortable, the recipe for happiness may be to enrich ourselves with meaningful experiences and human connections, not to further enrich our bank accounts.
"What’s a good investment? Go home from work early and spend the afternoon throwing a ball around with your son." - Ben Stein on CNN
After all, we shouldn’t forget another famous saying: “You can't take it with you.”