Does money buy happiness?
Financial security reduces divorce rates, increases life span, and just plain feels good.1,2,3
Wealth purchases life-changing vacations, variety – the spice of life, and free time – with which to actually live life.
Despite this, the average person with a family income greater than $75,000 is just 12% happier than the average person with a family income of $30,000.4 They’ve adapted. To them, a juicy steak tastes just a bit better than $1 ramen tastes to me.
The common refrain money doesn’t buy happiness is true, but with a caveat – for the average person, money doesn’t buy happiness.
I am not one of those people. Most people aren’t.
After all, dozens of studies have shown it mostly true – for the average person, money doesn’t buy happiness.5
There’s a fix. We just need to stop being average.
If money doesn’t make you happy, then you probably aren’t spending it right.5
Money does buy happiness, but only when used in particular, often counter-intuitive ways.
This is part one in an eleven-part series on money and happiness. Let’s start with something practical and immediately implementable!
Buy many small pleasures, rather than a few big ones.
When I discover a new piece of entertainment I really like, whether an 800 page book, 50 episode series, $1,500 computer, or a new album, I devour it, as if possessed by a temporary addiction.
That’s stupid. I slob through what I should be savoring. Just as stupid, I waste the power of small.
You can either eat a 12 oz cookie now, or eat one 6 oz cookie today, and another tomorrow.
You can either purchase a 3 minute, continuous massage, or two 90 second massages, separated by 20 seconds.
Which would you pick? Which would you expect to give you more total pleasure?
What about listening to the newest song released by your favorite band, or listening to the first 160 seconds… taking a 20 second break, and then finishing the song?
I sure as heck wouldn’t want to have a song interrupted in the middle. That would really annoy me. No surprise, that would really annoy other people too.
In a 2008 study, participants were introduced to new music, exactly as described in the hypothetical above – half listened to the whole song at once, and the other half were interrupted in the middle for 20 seconds.
The participants were first asked which situation they expected to give them more pleasure. After the experience, they were asked how irritated they felt, and how much pleasure they experienced.
Those that were interrupted reported feeling annoyed. They also reported experiencing twice as much enjoyment than those in the continuous listening condition.6
Yes. You read that correctly. Those that were interrupted better enjoyed the experience.
The strangeness doesn’t stop with just this particular study.
In a study which replicated the hypothetical massage example above, participants reported being willing to pay twice as much for the separate massages, then for the combined, continuous massage.6 Most people extract greater pleasure from having two cookies on separate days, than both at once.7
Most absurd of all, the average person enjoys television more when it has commercials, than when they have been removed.8
I know. You probably thinking that you’re not that average person. Maybe – but in each of those studies, participants were consistently wrong. They expected to better enjoy the large, continuous experience. They almost never did.
What craziness is going on?
Adaption. A blessing to one in hard circumstances; a pain in the a&& to one in mild circumstances.
Most of us are in mild circumstances.
During any given experience, as time passes, one of three things happens:
- We sensitize, getting more and more enjoyment or pain.
- We adapt, getting less and less enjoyment or pain.
- We neither sensitize or adapt, getting the same enjoyment or pain over and over again.
Socializing is usually awesome because it falls under category 3 - it feels great each and every time we do it. In another post in the series, I’ll talk about what types of things fall under this category, because we’ll want to get as much of them as we can.
Sadly, most the things we buy with money fall under the second category, with them giving us less and less enjoyment over time.
Suppose we’ve been given six cookies, and decide to eat them all at once.
The first cookie gives us a jolt of ecstasy. The second, a more mild buzz. The third, a pleasant sensation. The fourth, a tingle. The fifth, nothing. The sixth, stomach pain.
The total pleasure from eating those six cookies? Ecstasy + pleasant jolt + mild buzz + tingle + nothing + stomach pain.
Graphically, it looks like this:
Yes, I have a weak stomach. It can only handle 6 cookies.
Although you may be able to eat more cookies before they start giving you pain – after the first few bites, just like with me and hundreds of study participants, those cookies will start giving you less and less pleasure.
It’s not just cookies.
Six months ago I purchased a $1,500 beast of a computer. For all of my teenage and adult years, I always wanted a computer that worked, fast.
I’m using that computer right now… and it is giving me no more pleasure than my old $500 laptop. The first few days and weeks I was ecstatic.
But soon, rather than comparing my $1,500 beast to my $500 laptop, I started comparing it to those first few months when it worked perfectly. You know how that goes. Viruses and malware bring even the best of computers to their knees.
Total pleasure from spending $1,500 on an awesome computer? Ecstasy + pleasant jolt + mild buzz + tingle + nothing + stomach pain.
Large house, finished basement, expensive car, brand name clothes – the same pattern applies. Over time, the object gives less and less pleasure.
We can fight back.
Adaption goes away quickly. Have cookie number one today, cookie number two tomorrow, take a break for a day, have another cookie, and so on.
What’s the result? Ecstasy + ecstasy + ecstasy + ecstasy + ecstasy + ecstasy.
Graphically, it looks like this:
We took something big – six cookies at once, and divided it into many small things -six separate cookies.
The same principal applies to my $1,500 mistake. If I had spent it instead on several small things, my total pleasure would have much greater.
I should have gotten the cheapest computer that would let me remain productive, and spent the rest on smaller purchases:
Purchase 1: Ballroom dance lessons. Ecstasy.
Purchase 2: Hot dates in the city. Ecstasy.
Purchase 3: Gifts for family members. Ecstasy.
Purchase 4: Shiatsu massages. Ecstasy.
Purchase 15: Drinks with friends. Ecstasy.
Total pleasure? Ecstasy + ecstasy + ecstasy + ecstasy + ecstasy + ecstasy.
When you can, divide up large purchases into smaller ones. By doing so, the curse of adaption can be partially subverted.
It won’t always be easy, but if you give in to average desires, the outcome will also be like average – money won’t buy you happiness.
This is part one of my eleven-part series on money and happiness. Check out the rest!
Money Secret #1: Buy Many Small Pleasures
2. Why do Low-Income Couples Marry Less and Divorce More? [http://dmmsclick.wiley.com/view.asp?m=71qaai3adkwny5cktesq&u=20447447&f=h]
3. Trends in Mortality Differentials and Life Expectancy, By Average Relative Earnings [http://www.ssa.gov/policy/docs/workingpapers/wp108.html]
4. General Social Surveys, 1972-2006
5. Dunn, E. W., Gilbert, D. T., & Wilson, T. D. (2011). If money doesn’t make you happy, then you probably aren’t spending it right. Journal Of Consumer Psychology (Elsevier Science), 21(2), 115-125. doi:10.1016/j.jcps.2011.02.002
6. Nelson, L. D., & Meyvis, T. (2008). Interrupted consumption: Adaptation and
the disruption of hedonic experience. Journal of Marketing Research, 45,
7. Linville, P. W., & Fischer, G. W. (1991). Preferences for Separating or Combining Events. Journal Of Personality & Social Psychology, 60(1), 5-23.
8. Nelson, Leif, Tom Meyvis, and Jeff Galak (2009), “Enhancing the Television Viewing Experience through Commercial Interruptions,”Journal of Consumer Research, 36 (August), 160-172.