Happiness and Its Dependence on Money

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People over the years have been asking a truly eternal question: is happiness really about money? Professionals in different spheres of activities are trying to find the answer to this question to this very day. Experts in the economic sphere assure that the matter is in quantity. In other words, the more money a person has, the happier he or she feels. Many billionaires also insist that lots of money bring them happiness in terms of profits and innovations. Other researchers argue that a shortage of cash can adversely affect people who are prone to depression. But how then we can explain the fate of successful and wealthy people who committed suicide because they were lonely and depressed? Had they really been happy if they decided to end their life in this way? While it is undeniable that it is hardly possible to live without money, the idea of the fact that money can buy happiness misleads most people all over the world. As a matter of fact, having too much money can negatively affect one’s life and make the person even less happy. So what is the secret to happiness? How much money do we need to become happy without going overboard? While true happiness depends on such factors as internal satisfaction, meaningful relationships and good health, money, if used wisely, is an important attribute that can help achieve happiness. Perhaps, money by itself cannot bring happiness, but not having enough money to live a comfortable life will intensely limit one’s life satisfaction. In this case, once people can clearly define their basic needs, they will be able to set modest aspirations and get to the optimal point of happiness.

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First, any person is very unlikely to be happy if all his or her bare necessities were stripped away. The obvious thing is that if you don’t have a roof over your head or food in your fridge, finding happiness may seem absurd. Money gives the opportunity to improve one’s quality of life by providing the basic necessities. Unfortunately, most people do not even have access to healthy products in the form of the main source of food. In more global terms, the proof that rich people live longer is a simple statistic of life expectancy. With the exception of a small number of island states in which a favorable climate and good food are still available, the length of life in poor countries is much less than in developed ones. According to Ed Diener, a professor of psychology at the University of Illinois, “When we later examine the happiness of nations, we will see that all of the societies with the highest life satisfaction are wealthy ones, such as Ireland and Denmark, and most of the unhappiest nations are extremely poor ones, such Sierra Leone and Togo. Indeed, the wealth of nations is one of the strongest, if not the strongest, predictors of the life satisfaction in societies.” (Parfitt and Skorczewski 163) In other words, money makes a significant difference in the happiness levels of poor people. All of the extremely poor nations tend to be unhappy due to the simple fact that their basic needs are not covered. As Daniel Kahneman, a Nobel Prize Winner once said, “Money does not buy you happiness, but lack of money certainly buys you misery.” (Reeves) Therefore, while money may not buy happiness, it sure is an essential contributor to one’s life satisfaction as it provides fundamental necessities, such as shelter, healthy food, clothing, and education.

Second, defining and understanding basic human needs are key factors in one’s psychological well-being. Nowadays, in our consumption-driven society, it is often times challenging to distinguish between necessities and luxuries. The mass media forces people to want beautiful clothes and luxury cars which they constantly see on TV. We have been programmed to go after money and desire materialistic things in the pursuit of happiness. As a consequence, people tend to acquire high aspirations which, if combined with an incompatible income, may result in decreased levels of happiness. According to Diener and Biswas-Diener, “Having high aspirations is not always bad, especially if they match your level of income. However, when aspirations run out of control, and are too heavily focused on physical comfort and luxury items, we brand this materialism.” (Parfitt and Skorczewski 172) In other words, high aspirations based on luxury items which are not harmonized with one’s earnings lead to decreased life satisfaction, while modest desires that satisfy one’s level of income contribute to high levels of happiness. In addition, studies show that people who are materialistic tend to be less happy than those who are not. The problem is that materialists regularly feel as though they need more money; they want bigger houses, fancier cars, extravagant clothes. As Gretchen Rubin, an author of an international bestseller The Happiness Project, states, “Because money permits a constant stream of luxuries and indulgences, it can take away their savor, and by permitting instant gratification, money shortcuts the happiness of anticipation.” (177) Basically, Rubin is saying that as purchasing more things become habitual, meanwhile, it gets less enjoyable as it takes away a modest pleasure from a purchase. For this reason, to attain true happiness it is crucial to determine modest aspirations that will match one’s income level and allow to avoid unnecessary expenses.

Further, having met their basic needs and set modest aspirations, people manage to achieve the optimal point of happiness. But what comes next? Will we become any happier if we go beyond this optimal point? A new study conducted by the psychologists at Purdue University suggests that for optimal life satisfaction an individual has to earn $95,000 a year – anything that goes beyond this number does not seem to radically affect one’s happiness levels. Moreover, some evidence indicates that making much more than that amount can actually make a person less happy. According to Andrew T. Jebb, the lead author of the study and a Ph.D. student at Purdue University, “First, higher income is usually associated with greater time demands, responsibility demands, mental demands. It’s not the higher incomes themselves but the costs of them. It is possible that these factors cause one to rate satisfaction with life to be a bit lower. I.e. I like my life but wish I could spend more time with family.” (Warren) In other words, the constant pursuit of money is both time-consuming and distracting as a person who is completely involved with his or her job has very little time for family and friends. As a consequence, people result in lacking meaningful relationships and experiences in their lives. Therefore, people do not need to earn too much money to become happier. Instead, being appreciative of the fact that you can afford basic necessities while avoiding financial anxiety will indeed help increase happiness levels and provide a sense of life satisfaction. 

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