iWatches, and handbags, and Benz’s, oh my!

We live in a consumerist nation. We love our stuff, and I can’t say I’m not a product of this society. We work hard for our money and, boy, do we love to spend it on the next bigger and better toy to show all of our friends. The real question is, do we really feel happiness as a result of buying new things, or is the saying “money can’t buy happiness” actually true?

Research shows us that it’s actually the latter. Money actually can't buy us happiness. Well, to a degree. Basically, what research

from the National Bureau of Economic Research hows us is that when looking at a nation’s wealth in relation to its overall satisfaction with life, no wealthy country shows dissatisfaction, but there are countries that are financially average that have high life satisfaction. This tells us that if you have more money, you’re less likely to be unhappy, but having low amounts of money doesn’t necessarily mean you’ll be unhappy. So, money does actually lead to higher rates of happiness and life satisfaction. More than likely, this has to do with the elimination of stress due to financial hardships. Paying bills on time, your car breaking down out of the blue, spontaneous medical bills… they’re not such a stressful thought when you know you make enough money to handle them.

So yeah, money is good to have, but to what degree?

Well, research

found at the Proceedings of the National Academy of Sciences of the United States of America shows us that people rate their life satisfaction higher as their income goes up but then becomes steady once they reach about $70k a year. This is a good indicator that it isn’t being able to buy expensive things and go on lavish vacations that brings us happiness and satisfaction, it’s being able to support ourselves and live comfortably without the typical financial stressors I mentioned above.

If having so much money and stuff doesn’t really bring us satisfaction in life, why do we keep buying so much stuff? Why, when we buy an expensive new car, do we eventually feel like a new one would make us happier?

It seems the answer lies in our ability to adapt very quickly. Basically, when base our satisfaction on how much above our ‘neutral’ we are, and that neutral adapts with what we get used to in our lives. This is called the adaptation-level phenomenon. Here’s an example: you have a car that’s a few years old. It’s a well-functioning car, but you’ve gotten used to it. It’s not new and fresh anymore. So, you start to want a new car. Nothing wrong with that. So you go and get a new one and feel great… for about a year. According to the adaptation-level phenomenon, you’ve let the new car become your new neutral so pretty soon you’ll want a newer, better car. It explains why we get comfortable, and could possibly become bored, in relationships after a while and why we can quickly become unenthused about the raise we got four months ago.

Another reason is the theory of social comparison. We constantly feel the need to be above others in whatever way possible. It goes with the story of the two guys who spot a bear heading their way. One guy starts putting on his sneakers and the other guy asks him why he’s putting his sneakers on, wearing sneakers won’t help him outrun a bear, and the guy replies that he doesn’t need to outrun the bear, he just needs to outrun the other guy. We, instinctively feel the need to out-do the people around us, because the only way we could survive before was if we were better, faster, stronger than everyone else. This now translates to us wanting to show our neighbors and peers that we have the biggest and best things. We make more money, we have the newer car, and we have the bigger house. It’s incredibly natural, and it explains why we constantly feel the need to purchase new things.

Overall, research

has shown that money can lead to satisfaction and happiness, but people who focus on extrinsic (beauty, popularity, prestige, wealth) goals versus intrinsic (personal growth, satisfying personal relationships) goals tend to be more unhappy. So having money and stuff can make us happier in ways of life satisfaction and feeling superior to our neighbors, but making it our focus and goal to gain these things can lead to dissatisfaction with life. Our desires to make more money and buy more things are instinctive and natural, but bigger and better won’t make us happy.