Money Can Buy Happiness: How to Spend to Get the Life You Want
By MP Dunleavey
Nearly forty years ago, Richard Easterlin, now an economist at the University of Southern California, began examining people's material desires and how they felt once they achieved those goals. Easterlin reviewed surveys of thousands of Americans, who said they believed the good life consisted of owning certain things-like having a nice car. pool, vacation home, and so on. While they themselves had only 1.7 of the desired items, they felt that owning 4.4. (on average) would constitute a satisfactory life.
That seems reasonable. You don't quite have all the things you want, but you're sure that when you acquire them, you'll be satisfied.
But when Easterlin then studied people's responses to the same questions many years later, he found that although on average people now owned 3.i of the desired goods-now they believed they wouldn't achieve the so-called good life until they owned 5.6 of them.
You can see how the underlying itch to acquire more (and more) turns into a never-ending treadmill of consumption - not because the things we want are bad, but because we attach to them an impossible outcome: that certain possessions can and will increase our happiness.
The confounding factor is that owning and buying stuff actually is fun. It's a normal, natural pail of life-one of the perks of having to spend your allotted time on planet earth. But a problem unfolds when the momentary kick fades, and your natural instinct is to want to achieve that feel-good state again somehow.
So you strive for the next thing, in the belief that maybe if you get more bang for your buck, this time it will last.
Unfortunately, a buck can buy only so much bang, and very quickly you're caught on what researchers have dubbed the "hedonic treadmill." the ceaseless quest for moremoremore that drives our lives, dominates our thoughts, and erodes our quality of life.
The Grass Is Always Greener
Why? Because people have an astonishing ability to adapt to almost any circumstance, positive or negative, with little change in our overall sense of well-being. Even studies of cancer patients and paraplegics have shown that people whom most of us would imagine to be depressed or suffering actually report being about as happy as healthy folks-because they've adapted to their lives. To be sure, a calamity like a sudden death, divorce, or job loss can be traumatic and isn't something you adjust to quickly at all. But the bulk of human experiences, especially when it comes to most monetary or material gains, have a surprisingly short-lived effect on how happy you are.
Materialism and Your Neighbor
As I mentioned in the last chapter, we are all vulnerable to the financial and material influences of the environment in which we live-never mind the pervasive power of media and advertising. But as much as you want to believe you're in charge of your own behavior, it pays to be aware of the impact that others' behavior may have on your own "investment" decisions, whether you know it or not.
This was captured in an article I read about the phenomenon of automaticity-the fascinating and depressing human tendency to imitate what's going on around us. One study found that when people were told to complete a task next to an experimenter who, for example, often rubbed her face, subjects likewise tended to rub their faces, even though afterward they had no idea that the experimenter's fidgeting had been "contagious." Another study found that when people were merely shown a series of words associated with being elderly, they behaved in a more elderly manner (i.e.. walked slower, were more forgetful)-again, without realizing they had succumbed to a series of covert directions, if you will.
It's not hard to imagine, then, the impact on your own financial desires when a friend spends twenty minutes relating her latest shopping extravaganza, describing her new Bose stereo, or has you take a spin in her cute new customized, fully loaded Mini Cooper.
Inflation of Our Expectations
So although it may seem obvious that buying less stuff will provide you with extra resources to invest in a happier way of life, every day you have to fend off a series of stealth assaults on your financial sanity-including the steady inflation of your own expectations for what a so-called "normal" or "average" life consists of.
Witness the average size of a new single-family home. In the early 1970s it was 1.500 square feet. As of early 3005 the average home size had grown to 2,400 square feet-and with it, people's expectations of how big an "average" home should be as well as which amenities should come with it, says Gopal Ahluwalia, vice president of research for the National Association of Home Builders.
What was once considered upscale is now the "new normal" for homeowners today. Ahluwalia says: from his and hers walk-in closets in the master bedroom to kitchen islands with cooktops to three-car garages. (People don't want a three-car garage because they have three cars, he added, but because they want to make sure they have enough storage for all their excess stuff.)
Nor have home sizes increased because people have bigger families. In the last thirty-five years. Ahluwalia says, the average family size declined to 2.11 people from 3.58.
That hasn't stopped people from spending a lot more money for an expanded way of life-whether or not they can afford it. No wonder Americans are experiencing an epidemic of debt and bankruptcy, the likes of which has never been seen before.
If Only Bigger Was Always Better
How do you combat the multitude of forces that influence how you spend your money and live your life? The first step is to become better acquainted with the joys of "inconspicuous consumption."
Inconspicuous consumption doesn't get a lot of airtime; you can't get it on sale at Kmart: Wal-Mart doesn't carry big tubs of it at a discount. The less-tangible pleasures in life rarely have the same wow power as things, even though they are more deeply satisfying. The core assets in the happiness portfolio I outlined in the last chapter are all based on inconspicuous consumption-spending less on stuff and more on life.
Exercise: Your Money and/or Your Life
To illustrate the contrast between conspicuous material desires and inconspicuous ones, Cornell economist Robert Frank created a series of thought experiments (below). The questions are based on his model, which you can find in his excellent book about the escalating insanity of materialism, Luxury Fever. There are no right answers-just read each one and think about it.
1. If you could live in a 4,000-square-foot home and have one week of vacation a year, or live in a 2,000-square-foot home and have three weeks' vacation, which would you choose?
2. If you could have a job that paid $200,000 a year, but you could only see your friends once a month, vs. a job that paid $100,000 and you could see your friends every week-which would you choose?
3. If you could buy a new 3,000-square-foot house for $400,000 (incurring a hefty mortgage) or an older home of the same size that would require some work for $200,000 (and more affordable monthly payments), which would you choose?
4. If you could land a job at the top of your profession, but you got to see your children for only a handful of hours a week, vs. keeping a job with less prestige, but which gave you a flexible schedule-which would you choose?
I love these brain twisters because they're a potent reminder that many of the assumptions we all live with-that the bigger house or better job is always the more desirable choice-may not be deep down what we want at all. In fact, it would be wise to consider whether choosing the alternatives might be the high road to a much more satisfying quality of life.