For the research, published in the Proceedings of the National Academy of Sciences, Matthew Killingsworth, PhD, a senior fellow and happiness researcher at the University of Pennsylvania's Wharton School, evaluated over 33,000 individuals by having them check in at random points throughout their days to reflect on their happiness levels. In analysis of this data, Dr. Killingsworth found that all measures of well-being increased with income, and that at no point did that correlation disappear. In other words, it appears as though money can buy you happiness. And recognizing that reality is, at its core, a wellness issue connected to access to social determinants of health.
"Anybody who says that money doesn’t buy happiness has never done their grocery shopping at the dollar store," says clinical psychologist Aimee Daramus, PsyD. "Money buys safety and security. It can buy belonging by allowing you to do the same things and wear similar clothes to your friends and co-workers. It means that you can have health insurance and free time and exercise equipment at your house, or live in a neighborhood where you can go running at night safely. You can afford vacations, massages, and put money away so that you’re less afraid of emergencies."
"Happiness comes from more than just money. It comes from relationships, job satisfaction, and enjoying your life." —Aimee Daramus, PsyD
While the major takeaway is that increased funds buys people more control over their livelihood, rather than money itself driving their choices, there is a major caveat to the notion of the happiness plateau being a myth. According to Dr. Killingsworth's research, income level and happiness level do rise in tandem, but money is not the only factor in the equation of a person's well-being. In fact, he concluded, it's one we often overestimate—once we make enough to not worry about being able to afford basic needs for survival, that is. "Happiness comes from more than just money," Dr. Daramus agrees. "It comes from relationships, job satisfaction, and enjoying your life."
And while this study didn't evaluate what happens to happiness levels when a person's personal income increases—instead, it compared the happiness of individuals at higher income levels to those at lower income levels to deduce static rates of happiness of various people at various income levels—financial psychologist Amanda Clayman, LCSW, says she doesn't believe a raise would necessarily bump your overall well-being as much as you might think.
Essentially, she says, people acclimate pretty quickly to the new amount they're making and typically return to their baseline happiness. "It's only pleasurable to us because the change is pleasurable, but then it ceases to have the same positive effects," she says. This is important to keep in mind, Clayman says, because your expectation that more money will make you happier can actually contribute to unhappiness once you realize that's not exactly true—you're still the same person with the same interior world and baseline happiness, despite your newfound cash flow. "It's not like money guarantees a certain level of happiness. It just means you don't have the same level of predictable unhappiness," she says.
Clayman adds that the correlation between happiness and money is highly individualized and largely dependent on what money means to a person. In order for your finances to effectively boost your happiness levels (again, once you can afford to address your basic needs), you have to first assess what it is that you hope to gain from money.
For example, you may also equate money with freedom—as I realized, in conversation with Clayman, that I do. For me, that's freedom to do the work I enjoy versus the work required solely to pay bills. For some people, it's the freedom to spend as they choose in any given moment, without restraint. And for others, says Clayman, it's both—and those two often-competing values can cause tension that leads to financially related unhappiness. After all, if you need to accumulate wealth in order to acquire the freedom to earn as you choose, spending whatever you what, whenever you want may hinder that goal.
So while this new research correlates increased income to an improved overall well-being, Clayman agrees with Dr. Killinsgworth's finding that it's no reason to overstate the role of money in the happiness equation. Rather than focusing on a desire for more, she advises looking inward at the intentions you have for money. That way, if you do achieve financial goals, you'll be prepared to spend the money in a way that allows you to maintain the boost in happiness it provides. And if you don't, you may be able to find other ways to achieve (or let go of) what you think money will do for you.
"Instead of thinking about the amount of money that's predictive of happiness, think about what it is you're using money to measure that you think is going to give you some sort of boost in your happiness levels," Clayman says. "The way that money makes sense is not as linear or binary as the idea that having more or less money is going to have a direct effect on your level of happiness."
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