“Money makes the world go round”, is an age-old adage about money, just like the old question of whether it makes you happy or not. The Beatles say that money “can’t buy me love”, but what does science have to say about it? Popular studies conducted by psychologists try to answer this question and the results are surprising.
Experiences versus Material Things
Professor Ryan Howell of San Francisco State University has been studying about the relationships of wealth consumption and happiness and other factors that make humans happy.He knows there are studies to prove that experiences give people lasting happiness than material things but people still tend to deprive themselves of experiences and choose material items. He decided to find out what lies behind this.
He found out that people still think that material things offer better value for their cash because experiences are short-lived while the things they can buy could last. This is why most people tend to stick to goods when they are more conscious of money, even though they would splurge on vacation or concerts. Professor Howell found out that when these people looked back, they realized that their experiences are the ones that brought better value for their money. People just think that experiences bring only temporary happiness. Truth is, these experiences provide happiness and lasting value. People just tend to keep on buying material things for they see them as tangible goods that can be used repeatedly.
Professor Gilovich of the Cornell University has findings similar to that of Howell’s. He concluded that people make rational calculations. If they have limited money and choose between buying this or going there, they would choose to buy this because going there would be great but is temporary. Buying this would mean always having it.
Spending Money on Others
According to the professor, this may be true but not psychologically. What does he mean by that? It could be explained by hedonic adaptation, the tendency of people to return to a relatively stable state of emotion after a major happy event or life change. No matter how ecstatic you were after purchasing your car, house or any other item, you will eventually get used to seeing them and such happiness could fade. On the other hand, experiences meet humans’ underlying psychological needs. When experiences are shared with others, it can give a better sense of connection and form a sense of identity. Memorable experiences are something you can always remember and speak about, long after your expensive dress has faded.
Michael Norton of Harvard Business School and his colleagues Elizabeth Dunn and Lara Aknin of the University of British Columbia also have an insight regarding spending money and happiness. They conducted a research and concluded that spending money on others is actually what gives happiness. They came up with this after working on three different studies and found out that the real issue is not about money being the one to bring happiness, but how you spend it.
Happiness could be relative and difficult to quantify, but people will agree that it is a positive or pleasant emotion. People may find satisfaction and happiness in different ways. Having a big income is no guarantee you are happier, it is how you spend it like if you share it with others or splurge on travels that enrich your life experiences. In the end, it is up to you to decide on spending it with what makes you happy, or choosing to save it rather than spend it.
Featured and 1st image by David Boyle from London, UK (DSC09241-1 Uploaded by JohnnyMrNinja) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons
2nd image by Manuel Dohmen (Own work) [GFDL (http://www.gnu.org/copyleft/fdl.html), CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0/) or CC BY-SA 2.0 de (http://creativecommons.org/licenses/by-sa/2.0/de/deed.en)], via Wikimedia Commons