If you've been reading our blog for any time now, you may have noticed that we're big on heeding the academic evidence on nearly everything, from investment strategy to traffic jams. Today, let's talk about the evidence on what makes happy humans. Science reveals what you might already have guessed: Yes, having money helps. But just in time for Thanksgiving, it's good to know that gratitude, generosity and memorable experiences also play major roles. That Black Friday shopping spree? Not so much.
A recent Wall Street Journal article, "Can Money Buy You Happiness" provides a handy overview of a series of studies by a number of behavioral psychologists who have dedicated their careers to exploring these sorts of things. To cut to the chase, they have found that a certain level of wealth does contribute to happiness – and increased wealth might increase your happiness. But, "What matters a lot more than a big income is how people spend it."
In general, people report finding more happiness in their life experiences than in purchasing material goods. And yet their spending habits tend to run counter to that wisdom. Cornell University professor and behavioral finance author Thomas Gilovich reported that, "People often make a rational calculation ... If I buy this thing, at least I'll always have it. That is factually true, but not psychologically true."
Here is what the data reveals about why we might not find the happiness we're seeking in these sorts of rational calculations:
- We adapt to material goods - The more we have, the more we grow accustomed to it and the more we want. Psychology has a term for this: hedonic adaptation.
- We covet others' possessions, more than their experiences - We tend to be bothered by comparing our lesser possessions to those of our peers, but we do NOT experience a similar let-down when comparing happy experiences. So while you may enjoy your Prius less when it's sitting next to your neighbors' new Tesla, the fantastic time you had on your vacation to Disneyland is undiminished by news of their more lavish European cruise.
- We dream of action - Studies showed that we are happier daydreaming about upcoming experiences than anticipated product purchases. The article cites a study by Professor Gilovich entitled "Waiting for Merlot" (see, academics can have fun, too), in which he and his colleagues showed that waiting for a material thing "seemed to have an impatient quality," whereas anticipating an upcoming event generated feelings of excitement.
Based on the evidence, the article suggested a number of ways to get (or stay) happy:
- Conscious gratitude – To ward off your tendency for hedonic adaptation, set aside time each day to be consciously grateful for what you've got.
- Surprise yourself – Psychology professor Sonja Lyubomirsky notes that gratitude alone might not cut it. You might have to switch up your gratitude routines, lest they too lose their oomph. For example, rearranging your possessions, such as moving your artwork around or giving up your favorite food for a week, can renew your appreciation for an old possession.
- Buy some time – Associate Professor Elizabeth Dunn recommends that you spend money to save time. "Don't buy a slightly fancier car so that you have heated seats during your two-hour commute," she says. "Buy a place close to work, so that you can use that final hour of daylight to kick a ball around in the park with your kids."
- Share the bounty – As the article describes, "The paradox of money is that although earning more of it tends to enhance our wellbeing, we become happier by giving it away than by spending it on ourselves." There's a popular TED Talks video, "How to buy happiness" that explores this two-way street to happier living.
- Strengthen that safety net – Before you give away all of your wealth in giddy abandon, scholars also agree that it's important to not get in over your head, whether spending on yourself or anyone else. "Savings are good for happiness; debt is bad for happiness," says Professor Dunn.
So, to swing into this year's holiday season in a happy state: Save some of your riches for a rainy (or snowy) day. Give as much as you're able to others and be consciously grateful for any gifts received. Oh, and during your Thanksgiving Feast, if you're craving an extra helping of pie, you've got our permission to go for it.