7 reasons why money alone does not make us happy
European Business Listicle 31/2018
What really makes us happy? Faced with this question, many people immediately think of money. How nice would it be, for example, if we could afford everything we wanted? To be able to fulfil every desire and not to have any financial problems sounds wonderful; in our opinion though, it is not enough for lasting happiness. We have compiled seven reasons which explain why money alone does not make us happy.
1. Some things money just can’t buy
Firstly, and most importantly, money plays a decisive role in everyday life for all of us. Having so much money that financial worries just don’t exist can certainly create a sense of well-being. The same applies for the luxury goods that one can buy if the bank balance allows it. However, there are things in life that money can’t buy – health, family and friends, for example – but which heavily influence how we feel. Having enough money is undoubtedly an important factor but, at the same time, is no guarantee of happiness.
2. Social comparison
When it comes to happiness, what we possess certainly plays an important role. However, we are often tempted to compare ourselves to others and, if we fail to match up, this can lead to dissatisfaction. This is true, even when in absolute terms, we are not missing anything. A study by the Journal of Economic Behavior demonstrated this. Participants were given the choice between two fictitious scenarios: An income of 50,000 EUR per year when the average income is 25,000 EUR; or an income of 100,000 EUR per year when the average income is 200,000 EUR. Half of the participants opted for the lower income because it made them appear more affluent in relative terms.https://www.sciencedirect.com/science/article/pii/S01672681980008943.
3. Valuable moments and memories
Wealth enables us to purchase material goods that not everybody can afford. That can, in the short term at least, make us happy. However, a study by the San Francisco State University shows that, in the long term, experiences and memories are more important when it comes to our own happiness. Experiences and memories, together with the associated emotions, can often bring a smile to our face even years later. Here too, of course, money can also be a means to an end, but it isn’t a necessity. We can experience moments to treasure with friends and family even without a lot of money.
4. The power of familiarity
Anyone who has (a lot of) money can afford lots of nice things. From flat screen TVs to sports cars – the possibilities are endless. The problem is though, that one quickly becomes accustomed to newly acquired luxury. The new sports car quickly becomes an everyday possession, and even the home cinema is, at some point, somehow nothing special any more. When one’s own wealth becomes the standard, our happiness hormones level themselves accordingly. The creation of happiness becomes more difficult, because it always takes that little bit more to achieve it .
5. What to do with all the money
We have already explained how, in the short term at least, money can make us happy. Decisive for long term happiness however, is how the money is used. Of course, it is completely fine to treat ourselves every now and again. Nevertheless, one shouldn’t forget that investing in others also brings rewards. Irrespective whether it is our own children, charity events, or inviting friends to a meal, investing one’s own money in others often results in affection, satisfaction and happiness.
6. Different generations, different values
To some extent, different generations have different values. This has an influence on the specific definition of happiness. While for some people, freedom and flexibility are the most important factors, for others status symbols are the top priority. It follows then, that differences such as these influence what makes us happy. For some, money alone is sufficient, for others it is not enough.
7. Work time is life time
Many wealthy people spend a large proportion of their time on activities which create stress. For example, they often work more hours than the average citizen. They often forget that work time is life time as well. Of course, one can experience happiness through one’s own work. However, for many people, happiness is directly connected to having enough time for family and friends. Everyone must decide for themselves what the right balance is. Without a doubt, those who sacrifice their private life for their work have more money, but they are not automatically happier.