“Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.”
– Will Smith
“What’s a soup kitchen?”
– Paris Hilton
Daniel Gilbert, Harvard psychologist and author of the best-selling Stumbling on Happiness, gave the keynote address at the American Psychological Association convention earlier this year. He challenged the three things he said his mother told him would make him happy: marriage, money and children. I’ve discussed the first one in talking about how, or if, relationships can make us happy. But now it is time to ask to ask the $64,000 question. Which, as it turns out, is the $75,000 question.
Can money make you happy? Is it true that those who say money can’t buy happiness don’t know where to shop? The general, mumbled answer you get from most people on the question is that money won’t do it. But what did the expert say? “Money can definitely make you happy,” Dr. Gilbert said at the convention, “and if you don’t think it does, give me yours.”
He pointed to data showing a direct relationship between a country’s per capita income and its reported degree of happiness. Poverty fosters a host of physical and emotional problems. It eclipses a sense of well-being and leaves in its wake a dearth of happiness. “Lack of money is the root of all evil,” as George Bernard Shaw said.
In general, wealthier countries people report more happiness. Or, as Woody Allen has said: “Money is better than poverty, if only for financial reasons.”
But there seems to be a law of diminishing returns. At some point money stops enhancing happiness.
The relationship between money and happiness isn’t quite that simple, of course. Some of the findings are confusing. Consider the fact that the United States came in fifth in a 2008-2009 Gallup poll on happiness but also had the fifth highest stress level. Are we happy because we have to be? Or are we stressed because we are striving for happiness?
Daniel Kahneman, Nobel laureate in economics, and his Princeton University colleague Angus Deaton, have recently published a paper that throws some light on the subject. They argue that the survey and previous data on happiness did not tease out the difference between emotional well-being and life evaluation — in essence, the difference between real joy and subdued contentment. The first is the smile factor, how joyous we are as we go through our daily life. The second is how “happy” we might be with our credit rating or insurance coverage.
When Kahneman and Deaton reevaluated the data along the lines of emotional wellbeing there was still a correlation with income and happiness. But this correlation plateaus at a specific point.
You guessed it: $75,000.
Beyond that, more money doesn’t equate to more smiles. You might feel better about your job or your home, but you won’t necessarily be singing Zip-A-Dee-Doo-Dah. Indeed, a raise might simply move you to be a chorus of “Heigh-ho, heigh-ho, it’s off to work we go.”
So money can buy happiness—up to a point. But once the basics are met, what is it that makes us joyous on a day-to-day basis? The quality of our social relations will bring us the joy we want, and that we can influence directly. One simple way is through kindness. Studies show that wellbeing and happiness are directly affected by the kindness we show toward others. When we engage in an act of kindness, not only does the recipient feel good, the giver derives a sense of joy from having done so. Studies show that counting the number of times you are kind in a day has a direct effect on your sense of well-being. If you count the kindnesses you do for others you become more kind and grateful.
The bumper sticker I’d like to see?
Kindness: It’s like money in the bank.