Why More Money Isn’t Making Us Happier
- Oct 26, 2022
- 6 min read
Updated: May 13, 2024
Written by: Travis Shelton, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
For centuries, humans have debated an age-old question. No, not “what is the purpose of life?” While that’s a juicy one, it falls beyond my expertise. I’m talking about the always controversial, “does money make us happy?”
Our culture’s general position today is quite clear. More money = more happiness. It’s not so much what people say, but rather how they behave. When we constantly pursue a life of more (bigger houses, nicer vacations, fancier cars, shinier technology), it’s a clear indication we generally believe that more money = more happiness. When we dedicate our livelihoods to climbing the corporate ladder, attaining that next promotion, and pursuing a bigger bonus, it’s a signal about what we believe. When we stockpile savings and investments instead of sharing with others (generosity), it’s a strong non-verbal we generally believe that more money = more happiness. We can easily find ourselves hopping onto the hamster wheel of more. The problem with more is that every time we have more, more is still more. We’re running at an ever-increasing pace to build wealth and have more, but are we actually getting anywhere?
Does more money make us happier?
Does making more income, having nicer things, and possessing more wealth actually make us happy? There tend to be two types of people: those who think money absolutely buys happiness and those who think money can’t buy happiness. Behavioral scientists have spent countless hours and research dollars trying to solve this riddle. Turns out, they are both right – and both wrong.
Money makes us really, really happy…(dramatic pause)...until our needs are met. This intuitively makes sense. If we’re under constant threat of getting evicted from our home, or if our water or electricity gets shut off, or we continually go to bed hungry each night, it’s arguable that our lack of financial resources is hindering our happiness. In this regard, more money makes us exceedingly happier. The research on this is quite clear.
Standard of Living vs. Quality of Life
Many of us have flirted with a challenging financial position in life at one point or another. We may not have fallen on the other side of the poverty line and fallen victim to some of these harsh consequences, but we may have skirted somewhat close and felt the stress of it. Most of us can think back to profound moments when just a little bit more money made us significantly happier.
With this context in the back of our minds, we naturally (from our own experience) associate more money with more happiness. Our brains do some mental gymnastics with that experience and we naturally assume that the steep correlation between more money and more happiness will extend into perpetuity. This is where the “...until our needs are met” idea comes in. Once we have enough resources to pay our bills (plus a little margin), the positive correlation between money and happiness tapers off significantly.
Then things get murky. The naysayers of this research are quick to point out how more money still equals more happiness. This is technically true given there’s still a slightly positive correlation between more money and more happiness. Even a one-degree slope is still a slope, after all. But here’s where the rubber meets the road. There’s a cost to having more. Oftentimes we exchange time for “more”, such as longer hours at work or more time on the road. Often we exchange our mental health for “more” by willingly subjecting ourselves to more pressure, weight, and responsibility. These things aren’t inherently bad, but there is a very real cost to career endeavors that simply offer financial rewards instead of something more fulfilling or in-tune with our unique passions. I meet people every day who have traded their passion for a paycheck. It’s staggering how many subject themselves to work they hate, simply because it pays well.
In my humble but strong opinion, the net impact of more money ‒ or more accurately the behaviors and decisions that lead us to more money ‒ often equates to less happiness. This common belief that more money = more happiness has resulted in an entire generation of people taking a path that leads to a higher standard of living but a lower quality of life.
Think about your journey and a time when your needs were met, but you made significantly less than you do now. Are you materially happier today than you were then? I’ve asked hundreds of people this question, and 90%+ of the time the answer is “no.” Same for me! Several years ago, this very revelation popped into my head as I was in a season making many multiples of my previous income. I was making more than I ever imagined, and money would never again be an issue for my family. Yet, I wasn’t as happy as I had previously been. Fast forward to today, more than three years after I left my career (and the money that comes with it), our happiness is higher than ever.
What will make us happier?
If more money won’t necessarily make us happier, what will? I’m glad you asked! Behavioral scientists have investigated many different aspects of our life to find a positive correlation with happiness. Three things stand out to me:
1. Work That Matters
Whether we like to acknowledge it or not, work is important. When we wake up and spend half our waking hours working, we ought to find some level of meaning and satisfaction in what we do. This specific factor ties very closely to the argument I previously made about exchanging our passions for a paycheck. Whether we make a lot or a little, the work we engage in drives our overall happiness. It’s not to say some work matters and some work doesn’t. All work matters. It’s just some work matters to me and different work matters to you.
2. Genuine Relationships
Having genuine relationships is the second significant driver of happiness. I’m not talking about the kind of friend we simply discuss sports and weather with. I’m talking about the person who is there to support us in our darkest days and will celebrate our brightest moments. Someone who we can be sincerely honest with and who will conversely be honest with us. Those relationships can be hard to find but are worth their weight in gold.
3. Generosity
The third factor stumps researchers. In short, studies show there’s a continual positive correlation between generosity and happiness. If we give, we become happier. If we give more, we become increasingly happier. And so on. Through the lens of more money = more happiness, this doesn’t make any sense. After all, if I give something away, I technically have less. Turns out that’s never true when it comes to generosity. When we give with no expectation of something in return, something inside us changes. If I’m having a rough day, my immediate go-to solution is to find an opportunity to be generous. Without fail, a simple generous act can propel me out of duress and into a much happier state. It’s also a state of happiness that satiates. True generosity has the power to alter our perspective, drive contentment, and recenter us on what truly matters.
The Path of Meaning
These behavioral ideas are admittedly counter-cultural and counter-intuitive. Many of you will choose the path of more and will seek to find out for yourselves. Or as one client responded after explaining how I previously went down the path of more and the grass wasn’t greener on the other side, “it will be fun to find out the hard way, I guess.”
The path to more is indeed a sexy path, filled with status, toys, and security. Wealth is wealth, and there is most certainly an upside to all that. However, what I’ve found and continue to seek each day is something far more rewarding: meaning. There will always be times I miss having “more”, but there’s no amount of money or possessions that could lead me away from the path of meaning. It’s a path I happily share with so many friends, colleagues, and clients. Good news: there’s room for you as well!
Travis Shelton, Executive Contributor Brainz Magazine
Travis Shelton is a financial coach, speaker, writer, and host of the Meaning Over Money podcast. Through various platforms, he engages in conversations about money and work, but through a different lens. He aims to help people live a life of meaning by pursuing work that matters, creating an impact on others, and redefining the role money plays in their lives. In his coaching, he works with people ranging from teachers, executives, missionaries, business owners, lawyers, doctors, and professional athletes.
