The relationship between money and happiness is one of the best researched and highly referenced findings of positive psychologists. Ed Diener and company have spent decades researching (for example: Diener, Ed and Shigehiro Oishi, (2000) “Money and Happiness: Income and Subjective Well-Being Across Nations.”) the link between money and subjective well-being among thousands of individuals from different nations. Their research has impacted the theories of economists, the policy of nations, and, hopefully, helped to correct the common misunderstanding that more money means increased happiness.
The central finding of Diener, and many other positive psychologists, is that income can enhance subjective well-being only insofar as it assists people to meet their most basic needs. In essence, we know from these findings that money can only affect the poorest individuals’ levels of happiness and well-being and that, once basic needs have been met, money plays a negligible role in an individual’s sense of happiness and/or increased well-being. Perhaps the best example of these fidnings is the research involving lottery winners – their “increased happiness” is only temporary, typically lasting only five years.
Today MSN Money ran an article entitled “7 Ways to Buy Happiness.” In this article the author, MP Dunleavey, the same author of “Money Can Buy Happiness,” had asked people to submit stories of how they used their money to make themselves happier. Her results compliment the findings of positive psychologists.
In her article she states, “… a lifestyle based on constant consumption probably won’t make you happy… When it comes to ‘intrinsic needs’… including food, rest, relationships, health – most people can naturally reach a point of satisfaction. Thus, spending more on quality of life, as opposed to stuff, appears to be a better investment. Indeed, when people submitted their stories about how they had spent money on something that made them happy, those intrinsic values carried the day.”
So what were the seven ways people spent their money and experienced an increased happiness?
1. Pursue Growth – invest in yourself.
2. Buy Back Your Time – “regain” person time.
3. Don’t Forget 4-legged Friends – assisting with animals.
4. Upgrade Your Life – saving or investing.
5. You Gain When You Give – give to others.
6. Invest in Bonds – invest “in the folks you love.”
7. Invest in Financial Security – plan for the future.
It is a fact, thanks to positive psychology, and the research of such individuals as Diener, that money simply doesn’t make most people any happier.