Week 4:Happiness and Money

What is happiness? How can it be obtained? Of course happiness is a subjective thing and means something different to different people. Many claim that it is something that you can’t put a monetary value on. Are they right? People commonly say: money can’t buy happiness. But have you ever wondered if it is true? Well, in the light of recently published studies the answer may be surprising. Those surveys reveal that money has a lot to do with happiness.

 

FROM: http://www.demotivation.us

FROM: http://cheezburger.com

 

                                                    FROM: http://jpegy.com

Before I explain what is the exact conclusion of those studies I would like to tell you about another experiment. It was made by Benjamin Wallace – an American journalist and writer. Wallace wondered what was the reason for people to spend a great amount of money to buy things. He also speculated if all those goods asserted them a better and happier life. To find the answer for those issues he decided to try things considered to be the most expensive in the world: he ate Kobe beef and white truffles, stayed at the Ty Warner Suit in the Four Seasons Hotel at Manhattan, tasted Per Me Olive Oil, drunk Chateau Cheval Blanc and Kopi Luwak coffee, drove Bugatti Veyron and did lots of other things unavailable for ordinary people.

http://www.ted.com/talks/benjamin_wallace_on_the_price_of_happiness.html

So what was his conclusion after trying those improperly pricy things? Could he find an answer if it was possible to buy happiness? Wallace did not give a positive answer. During his experiment he satirized spending money on something just because it was luxurious. He also made an interesting conclusion that we worship certain things according to our belief in its value. Of course Wallace's conclusion can be considered from the other side. We can analyse the journalist's experiment and ask some questions - what if Wallace did not enjoy spending this money just because he simply did not know where to do it. Once, a popular actress said: “Whoever said money can’t buy happiness simply didn’t know where to go shopping". Or maybe, to be more precise, Benjamin Wallace did not know how to spend money properly and that is why the effects of his experiment were unexpected.

It is commonly known that money has an effect on life satisfaction, especially because the more funds we have the more money we can spend to satisfy our basic needs. But how to spend money in the right way, so the spending brings happiness and benefits? Is there a proper way to do that? A professor of psychology Elisabeth Dunn and a professor of marketing Michael Norton in their book Happy Money: The Science of Smarter Spending try to convince us that the key to happiness is to spend our money right, in a smart way. But what is important, they reveal that the amount of money spent is not important: a good coffee in the morning bought in our favourite coffee house can be equal to diamond rings if you do it in a proper manner.

So how can we achieve happiness by using our money in an intelligent way? According to the authors, we have to try to implement a few principles:

1/ Buy experiences. Researchers show that anticipation of an event often increases a feeling of happiness more than the event itself. Avoiding buying material things can be a good idea because satisfaction with possessing them is temporary, and after a while they start to become trivial. On the contrary our brains process experiences all the time, so they are harder to forget and provide increasing benefits over time.

2/ Make it a special treat. Things that are used daily bring us less pleasure after time. It is a good idea not to repeat them every  day but once in a while, so they will be much more valuable and bring more positive feelings.

3/ Buy time. It is a good idea to hire somebody to help with everyday tasks just to obtain more leisure time. Free time gives an opportunity to do more interesting or favourite things. And the more time somebody has the more he appreciates the things he does.

4/ Pay now, consume later. There is nothing to explain on that subject! Paying for something right away brings more pleasure from buying it. Repaying a loan reduces the joy of purchase.

5/ Invest in others. Spending money on others makes it more fun than spending on ourselves. Need a proof? See a movie below, which presents interesting results of the experiment in which people had to spend money on themselves and on the others:

http://www.ted.com/talks/michael_norton_how_to_buy_happiness.html

Despite the findings mentioned above many psychologists express profound skepticism concerning the statement that happiness can be bought. They claim, inter alia, that wealth diminishes our ability to enjoy things we bought. A famous American psychologist, Sonja Lyubomirsky – a professor at the University of California, who made ​​the subject of happiness her scientific domain, says that the more money a person spends the higher expectations of the happiness level money should bring, and that can be very harmful and deceiving. So which approach is correct? I guess each of us must answer that question.

Here is an article by Sonja Lyubomirsky concerning the topic of money and happiness and a film in which she explains what is happiness.

Additional questions:

How can you explain the word “happiness”? What does it mean to you?

In your opinion does paying for happiness have more advantages or disadvantages?

What are the ways to achieve a good relation between money and happiness level?