May 16, 2020
Why Our Happiness is Money-Wired Wrongly
Is money really the key to happiness?
Being rich and being happy are two of the most common aspirations of life but they rarely go hand-in-hand. Is seeking that golden pot at the end of the rainbow really worth it?
According to Yale’s most popular online course The Science of Well-Being, research has found out that our minds are wired to find happiness on things that in fact provide the contrary.
Money is one of those traps. Hence the need to rewire our thinking to lean on things that do bring lasting satisfaction. Unfortunately, when it comes to money matters, our minds are inherently wired to think wrongly.
Resist Social Comparison
From the image above, which do you think is the larger orange circle, the left one or the right one?
Despite both orange circles actually being the same, we can’t help but feel that they differ due to the surrounding gray circles. We estimate their size relative to their surroundings and we fail to immediately perceive the absolute measure. Similarly, our brains fall prey to the same illusion, we find it hard to determine absolutes.
Recall a time when you won 2nd place in a competition. That feeling of being inches away from a win would prompt a bitter taste in your mouth. We find it hard to get over it that we forget the success of our win.
For a 3rd placer however, being able to secure a place in the podium is a feat savored since it could’ve easily gone the wrong way. The way we position our feelings are reference points. We may either anchor it to almost winning or almost losing.
According to an article on the Olympics, due to these salient reference points, bronze medal winners tend to be happier than silver medal winners.
The concept of relative comparison is all the more evident when it comes to money. According to the book The Hows of Happiness, every time your salary increases so does your desired or required income.
When we earn Php 30,000, we would want Php 50,000. When we get Php 50,000, we now want Php 75,000, and the cycle continues. We constantly bump ourselves up to a new reference point.
To back that up, research even tells us that for every $1.00 increase in your actual income, your “required income” increases by $1.40. These reference points are even worse when we compare it to our peers.
Which of the following scenarios would you prefer?
Option 1. You earn $50,000 while everyone else in your pay grade is only earning $25,000
Option 2. You earn $100,000 while everyone else in your pay grade is only earning $250,000
You might think that most people would choose Option 2 to double their salary and buy more stuff — but 56% actually ended up choosing Option 1.
In that hypothetical earnings situation provided to 260 individuals at Harvard School of Health, people were found to prefer earning less money as long as they made more than their peers rather than making more but having less than their peers.
Because of social comparison, we’d rather make impractical choices going as far as being less satisfied with our jobs as long as our coworkers make less money than we do. Admit it, we do feel that way sometimes and that only fuels unhappiness on our part.
People would prefer to earn less money as long as they made more than their peers rather than make more but have less than their peers. — Solnick & Hemenway
And it doesn’t stop there. The concept of reference points and social comparison further extends to our grades, physical appearance, and our relationships.
All these can easily define our way of thinking — and eventually, our perspective of happiness. Digest this saying by Phil Knight, “But that’s the nature of money. Whether you have it or not, whether you want it or not, whether you like it or not, it will try to define your days. Our task as human beings is not to let it.”
The challenge for us is to not let it define our days, our actions, and our thinking. It’s high time to rewire our minds to invest in what truly provides lasting happiness and satisfaction. To parry our inherent inclinations to money, let us instead seek time affluence and invest in experiences.
“The concept of reference points and social comparison further extends to our grades, physical appearance, and our relationships. All these can easily define our way of thinking – and eventually, our perspective of happiness.”
Seek Time Affluence
Time affluence is when you have time to do the things that you want to do and when you pursue activities that you find meaningful — it is when you are in the moment and not distracted. In contrast, time poverty is when you constantly feel stressed, rushed, and overworked.
Research has shown that prioritizing time affluence over financial affluence has been key to increasing a person’s happiness levels. One way to do this is to invest in experiences rather than material things. If possible, instead of aiming to buy a new car, a new phone, or a new clothing item invest it in travel, seminars, classes, and social events.
This act itself helps you prevent socially comparing yourself to other people, especially their material wealth and financial status.
A study tells us that experiential purchases, not material ones, make a person feel more alive and less vulnerable to social comparison. No one can have the same experiences as you do. You may have traveled to the same places but the experiences are never the same.
Still not convinced? Another study says that people respect individuals who share about their experiences more than individuals who share about material purchases. If you want a person to like you more, talk about your last travel, not your last Jordan 1 purchase.
Experiential purchases, not material ones, make a person feel more alive and less vulnerable to social comparison.— Hill
Even the sole act of thinking about time makes you happier than thinking about money. It is known to boost the drive to socialize and mingle with other people which in turn leads to increased happiness levels. If affluence is our end goal, let it be of time rather than money.
Rewire Your Happiness
You may have heard of stories of millionaires and celebrities that are depressed despite amassing the wealth we so seemingly yearn. Money, one way or another, has led them down that road through the our inherent understanding of it. That gold pot at the end of the rainbow isn’t all there is to life. Money is a great tool but never the end goal.
It’s up to us to rewire our happiness. Remember, our task as human beings is to not let money define us. Seek to rewire your minds to prioritize time affluence over financial affluence. Invest in experiences rather than material things. This is a data-driven and research-backed solution to our happiness crutch.
Apply this simple principle for a surefire way of finding lasting happiness — for no additional cost. Maybe this time, being rich and being happy, are two golden pots at the end of your rainbow.
Money is a great tool but never the end goal.
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