Money: Having Enough

These are hard times for many people. And the future doesn’t look all that bright. Naturally this leads to anxiety. Will we have enough?

Perhaps because we live in a world that constantly sends us confusing messages about what “enough” is, and confusing messages about how to achieve happiness (the entire advertising industry is more or less based on telling us that whatever we have is not “enough”), our brains are not very good at figuring out the answer to this important question.

Over the years we have noticed something odd – the people who have been the most preoccupied with money, and striving for more financial security, have been people who are relatively well off.

This may be related to the fact that these people have been trying to achieve a goal (happiness and an overall sense of security) in a way that is not all that effective.

Science teaches us that the best way to encourage a behavior is to reward it infrequently. Think of all those people sticking their coins into slot machines…

Trying to achieve a sense of security and happiness by saving or earning more money fits that perfectly. There is some connection between money and happiness, but not a very strong one.

A widely cited study by economist Angus Deaton and psychologist Daniel Kahneman (who won a Nobel Prize for Economics) analyzed the responses of 450,000 Americans polled by Gallup and Healthways in 2008 and 2009. Participants were asked how they had felt the previous day and whether they were living the best possible life for them. They were also asked about their income.

It turned out that up to an annual income of about 75,000 dollars a year, more money was somewhat associated with more daily happiness but above that level it wasn’t.

On the other hand, more income was associated with the notion that one’s life was “headed in the right direction.”

When we meet with folks who are very preoccupied with saving money, we often find that the problem they have is that they are pretty unhappy with their lives, they may be depressed, or have anxiety, or they may feel that no one cares for them. Saving money is the strategy they have adopted for dealing with these feelings. Since it is not very effective, they become obsessed with trying harder and harder.

Here are some things that work better –

  1. Staying connected with your values, and basing your decisions on those moral or ethical values.
  2. Nurturing strong friendships.
  3. A strong spiritual or religious faith.
  4. Getting therapy, or psychiatric treatment, especially if you are depressed.

For more about happiness – This Time magazine article is a bit old but pretty readable.

Martin Seligman is more or less the “father” of modern happiness science. His revised book (Authentic Happiness: Using the New Positive Psychology to Realize Your Potential for Lasting Fulfillment) is a good place to start.

Sonja Lyubomirsky has written a more accessible book (The How of Happiness: A New Approach to Getting the Life You Want).

Another popular book is The Science of Happiness: How Our Brains Make Us Happy – and What We Can Do to Get Happier by Stefan Klein and Stephen Lehmann.