There’s No Price Tag on Happiness

It's Not About The MoneyHappiness can be achieved through multiple ways. Some people achieve it through a perfect lifestyle, and some people achieve it through bringing new life, however most would argue that money is the most efficient way, and in some cases the only way, to achieve true satisfaction. They believe this, in the fact that most American authors during the Great Depression emphasize an ideal, in which an individual achieves true happiness, which is the American Dream. In their works, it is written that this Dream is achieved only by money, as seen in books, such as The Grapes of Wrath, and The Great Gatsby. As the American Dream is one definition to describe the correlation between money and happiness, the true correlation lies within its indirect but yet relevant connection, which consists of how much money a person receives and how they spends it, whether they purchase materials or an experience, and how money correlates with expectations.

How You Spend ItMoney can be spent in various ways. With this in mind, many rich people question themselves how to spend it. An experiment by Psychologist Daniel Kahneman and economist Angus Deaton concluded with the statement “that happiness doesn’t really increase above incomes of $75,000 a year”. This effect is due to the fact that the relationship between money and happiness isn’t really linear, in other words, the more money you receive, the more of a raise you need, in order to have a satisfying level of happiness. On a more realistic level “to get a 10% increase in Burundi doesn’t take a lot of dollars, whereas in the U.S. it takes a lot." meaning that if everyone receives a satisfying 10% raise, everyone would be happier, but would cost a lot more for the more superior, whereas a one thousand dollar raise would only satisfy those with a low annual income, while the people with more annual income only view it as another small bonus. With that question answered, some would argue that those, “who were directed to spend a small amount of money on other (either $5 or $20) reported greater feelings of happiness than those who were directed to spend the same amounts on themselves.” in other words, those who give charity are much happier than those who don’t. An experiment led by Lara Aknin of Simon Frase University showed this effect by "One group had to spend the money on themselves, one group had to give the card away and one was told to treat someone else to a Starbucks coffee”. Another factor in which happiniess, is affected by money is whether you spend on material wealth, or an experience.

It's Not About The Price TagMost people believe that if one would buy some kind of physical object instead of an experience of the same price, they would satisfy their happiness more so, since the object stays with you longer. As it turns out, "Nicolao et al. (2009) found evidence that confirmed previous research that we are also generally happier when we spend money on experiences -- like a vacation -- rather than material things." Does this mean to spend all of your savings, and half of your income just to go out on a vacation instead of buying something just as expensive? Of course not, as "a 2009 study of Dutch vacationers showed that the length of a trip doesn't affect happiness." As a matter of fact, happiness actually turns into stress with a longer vacation, since the longer a vacation, the more someone has to worry about the budget. Similarly, small experiences such as dinners could make a difference on how much one’s level of happiness increases by. For example, if one decides to either buy four $50 dinners, or one $200 dinner, most would expect that more dinners would satisfy, not only their hunger, but also their happiness. "As it happens, the $200 dinner will bring you more happiness". As a simple explanation, the more often someone does something; it becomes more of a routine, and loses its distinctiveness. Another key factor of increased levels of happiness is the anticipation of an event. "Research also shows that anticipating an event often increases happiness more than the event itself." Even though the event could be exciting, the time leading up to it builds up to the excitement, contrasting to it happening in an instant, where one’s happiness levels stay up only for half that time. On the other hand, even though most people enjoy the opportunity of using their wealth, those of the upper class have so much money, that their levels of both expectations of happiness, and income increase proportionally.

Equilibrium And The SolutionMost people would think to themselves of why does happiness not sustain itself for a very long time, even after a big event. There is a psychological explanation for this and, "It's called the hedonic treadmill and it means that we humans have a tendency to revert to a normative level of happiness even after undergoing major positive or negative life changes.", simply put that happiness always attempts to reach back to equilibrium, no matter what. In an economic perspective, "as a person increases their income, they also increase their expectations and what they want out of life." This attempt of happiness always going back down to equilibrium, and increase in expectations do not go well together, as the wealthy require even more wealth to satisfy their happiness. A simple method of fixing this scientific anomaly is simply by using any extra money that you would usually spend for wealth, and making certain investments, so one could reach back into that right amount of happiness through a $75,000 income amount. For example, "a study sponsored by Ally Bank showed that 84 percent of respondents acknowledged that saving for a rainy day makes them feel more in control of their lives, leading to an overall sense of well-being. And a majority said specifically that adding to their retirement account gave them a sense of accomplishment and made them feel proud of themselves." This clearly shows a contrast between the levels of happiness shown here, and the ones shown previously, as these retirees are both happy of their current wealth, and their decisions made in the past. On simpler terms, it is best to save your wealth, and not overwhelm yourself with this need to satisfy your happiness

There Are Other WaysIn conclusion, the relationship of happiness and money is that they are dependent on each other, not by what these physical note’s signify, but by how a person spends it, whether by means of charity, material, or experience, and by how levels of income correlate with anticipation. Although money is one of the most common ways a person believes that happiness could be fulfilled, they should look more into different methods, such as the psychological phenomena of nostalgia and dopamine release, as it requires much less effort, and writing on my part.