ICRAVE Understanding Money and Happiness

See the source image

A lot of people go through life chasing money. It makes perfect sense because money is what’s needed to provide us with food, clothing, medical care, and a roof over our heads.

  • If you don’t have any money, you’re unable to fulfill those basic needs.
    • And when we don’t have those essentials sorted out, we probably won’t feel too happy.
  • In this case, getting our hands on some money will definitely bring us joy, as it would allow us to buy the necessities for a normal life.

Now, you don’t have to be living on the streets, for money to make you happier.

  • Living paycheck to paycheck, and constantly worrying if you’re going to be able to pay your bills and make it through the month, has been shown to cause a lot of stress.
  • Also being thousands of dollars in debt, and not knowing how you’ll pay it off, has been linked to depression, anxiety, hopelessness and a lower life evaluation.
  • Money, would again, make you happier in this case, as there would be one less thing to constantly worry about.

However, when it comes to money, we’re never really going to be quite satisfied. We feel like we always need just a little more because of a concept called hedonic adaptation.

  • Let’s say you’re currently making $30,000 per year, but then you get hired at another job that pays you $50,000.
    • You would feel pretty good right?
  • The mistake would be to assume that you’re going to feel that way forever.
    • While your happiness would definitely spike up, it would only last a short time.
    • Over the course of the next few months, you would get accustomed to this new income.
  • Essentially your new wealth would become your new normal. And you would need to get a raise, or a better paying job to feel happier again.
    • Until of course, you get used to it again, just like before.

Interestingly enough, a lot of people don’t know that this type of adaptation will even take place. Perhaps it’s because it happens so gradually that we don’t usually notice it.

  • For example, we experience the same type of unnoticed adaptation with temperature. Imagine you’re out on a hot summer’s day.  But then you enter your air-conditioned house. The air feels very cold, compared to the heat outside.
  • However, as you spend more time in the house, you get so accustomed to the air conditioning, that you don’t even notice that it’s there.
    • What was fresh and cold before, now feels like a normal temperature, because you’ve adapted to it.
  • And the exact same thing happens when you acquire money or other material possessions.  When you buy a new fancy sports car, sure, you’ll feel great about it for a few weeks. But that feeling of novelty will fade away.
    • Your new car might be better than the last one, but you won’t feel as excited about driving it, like you were on the first day.
  • The same happens when you buy a bigger house. You’ll feel great about your purchase, until of course, this new house becomes your new normal, and you start dreaming about an even bigger house, with a better view.
    • Make no mistake, objectively you will live better. But you won’t feel better about how you live.
  • Every single time, you will adapt and feel like you could use a slightly better car, a bigger house, and a little more money.

Image result for reward

Re-source: Reward

A consequence that happens to someone as a result of worthy or unworthy behavior : The return for performance of a desired behavior; positive reinforcement.  

How should we spend our money, so that we can get the most happiness out of it? One way is to spend it on experiences.

  • Things like a romantic meal with your partner, a trip to an adrenaline park, or attending a concert.
    • We don’t really adapt to these types of experiences, because they’re usually short.
  • But keep in mind, that if you start dining out every day, then it’s not considered an experience any longer.
    • It’s a change in lifestyle, which you will adapt to, and treat as a regular day.
  • To avoid this trap, make sure to keep your luxurious experiences rare.
    • What’s the point of a good meal, if it doesn’t make you feel good?

Another thing we could spend our money on, is other people.

  • This might sound counter-intuitive, because when you think about spending money, you think about spending it on yourself.
  • But studies have shown that when people spend money on others, instead of on themselves, they feel happier.
  • It doesn’t matter how the money is spent. It can be a small gift, or even a charitable donation.
  • Neither does it matter how much of it was spent. It’s the act of giving that has measure.
  • Improving someone’s day, improves your day.

Another good way to spend your money is to buy yourself more free time.

  • People who spend most of their time working and trying to earn more money, tend to enjoy their lives less.
  • People who have more time for themselves, report enjoying their life much more, even if they don’t earn as much.
  • Doing something voluntarily because you enjoy it, and not because you have to do it, increases happiness while avoiding adaptation effects.
  • Whether it’s gardening, roller-skating, or writing a novel, it’s good to dedicate at least some of your time to a hobby you enjoy.

craving and resource from “Better Than Yesterday” – The Truth About Money & Happiness.