“There is a correlation between a person’s wealth and decreased ability to savor pleasant experiences”
374 adults in varying ranges of jobs, were split into two groups.
The first group was shown a stack of money and the second group, a blurred money of money.
Then they were tested psychologically to measure “savouring ability”, “happiness” and “desire for wealth”.
The first group, who had seen the money beforehand, scored significantly lower in their ability to savour pleasant experiences.
Just the thought of money had diminished their ability to appreciate and savor pleasant experiences.
A simple reminder of wealth can significantly diminish the pleasant experience.
Via Psychology Today
Beyond a certain salary, money doesn’t buy happiness
I think I read somewhere that if you earn $60,000, that is the maximum threshold for being happy with money.
That’s well above the average salary of an American — which I do believe lies around the $30,000 range, and for Canadians, around $33,000.
It also means that you are able (hypothetically) to cover your basic needs, and then some.
(Granted, if you live in New York City or Los Angeles, that may not be the case because $60,000 will barely cover your cost of living unless you live with 5 roommates + a rat, but this is a generalization.)
Any salary beyond that range, did not result in MORE happiness through money, in fact, they were maxed out of happiness at around the $100,000 range, and any amount earned beyond that, was negligible in terms of being happy.
Why? My reasoning is as follows:
- to earn that kind of money, you have to work long hours, and deal with a lot more stress
- that kind of money, brings a lot of social pressures to upgrade your lifestyle to fit in
- you can buy (almost) whatever you want, so your previous ‘little luxuries’ become boring & normal
Evidence?
My family is a great example of this, myself included (example to follow).
My brother seemed happier making $50,000 a year, struggling with his wife in school, than he is now, earning 6-8 times that,with 2 kids, a big house, 2 cars and a full-time manny.
(He lives in a moderate-to-high cost city, by the way, but nothing on the scale of NYC)
All the previous little pleasures of taking small trips overseas and backpacking it to save money, have been replaced by first-class tickets, staying in 5-star hotels and being bored, cynical tourists.
They used to treat themselves to ONE cup of takeout coffee a day, and now it’s 3 times a day, a small pleasure that has been turned into a daily routine.
She used to go get manicures and pedicures with a spa massage, every 3 months as a treat, and now it’s every week.
And like addicts they want the next level of intensity, and they need a new high.
Now they’re talking about buying a second home (a little “cottage”) up north so they can vacation there in the summer.
They’re not living in the moment right now & their pleasure centers are shot
Money has taken over his life and he is now obsessed.
All he eats, thinks, dreams, sleeps and talks about.. is money — making it, saving it, spending it, investing it and losing it. He doesn’t enjoy the memories it buys, he’s always thinking about the next buck, and the next, and the next…
He seriously looks like this 99% of the time —–> $_$
Case in point:
When my contract was cut short, he greeted me with the saddest, most sympathetic facial expression I had ever seen on him in his life, including when close-to-me family members died! It was as though it was the end of the world.
My reaction must have puzzled him, because I looked at him with slight amusement & alarm said: “It’s…. cool. Really. I’m all right with it, it’s the nature of the business. I was mad, but now I’m over it.”
He still continued to offer apologies, as if I had lost a limb or something. It’s just money!!
…and I do know how that feels!
I’m no saint because I’ve been there and done that.
It’s a lot like the living from paycheque to paycheque mentality, but just with different reasons.
People who live paycheque to paycheque, never feel like they have enough, they envy what others have, and they are resentful of what they don’t have.
This attitude holds true, even for those of us who live that way by choice, like when we scrimp and save to clear our debts as fast as possible.
See, when I was in debt, money was all I could think about, and all my money bought me, was unhappiness.
I would buy myself a treat at Starbucks every month or so, and while it was still a treat, it was soured with the thoughts of: “Gee that could have gone to my debt…. and come to think of it, I earn a good salary. Why CAN’T I treat myself to a Starbucks everyday like Melissa? STUPID DEBT!! ARG!!”
It builds up.
All I could think about was exactly the same as above: not feeling like I had enough, envying what my debt-free friends had (savings & pretty things), and feeling resentful of my school debt.
It wasn’t as though I lived like a monk to clear my debt, because I still spent money on entertainment & shopping.. but every time I did, it was tainted with the thoughts of money. It ruled my life.
Since blogging about my journey out of debt, I’ve learned the big difference between talking about money & being obsessed by it.
It may not be obvious on this blog, because all PF’ers tend to be money-crazed to some extent, but while I ADORE talking about money (saving, earning, spending !!), it isn’t the only topic on my brain (any more).
That kind of obsession eats away at you, and it’s why I don’t want anyone who IS in debt, to get into that kind of poisonous head spin.
Have you ever been (or are you now currently) obsessed about money?
Just a girl trying to find a balance between being a Shopaholic and a Saver.
I cleared $60,000 in 18 months earning $65,000 gross/year.
Now I am self-employed, and you can read more about 
I have all the latest stuff hundreds of pounds worth of makeup a massive house plenty of luxuries, but all I can talk about is money and what I want or am getting I’m only 13 and really don’t know why all I can think about is money.
I have a friend who I happen to love dearly who has become obsessed by it. I googled this to get a peek into her world. She’s very encouraging in the way of “this is how you can make more” but truthfully it’s just not how I want to spend my limited time on earth. So I am happy that she’s making money but it’s not for me. I’m not sure if it keeps her busy or why she does it. I just know that I don’t think it’s very healthy to spend my days, day after day coming up with ways to make more and when is more enough? I rarely think about my debt. I pay it every month but don’t pay much attention to it outside of the occasional dropping a large amount to lower it with tax refunds or the such. There was a time when I was debt free but not since I bought my house. There will be a time when I am debt free again but I’m not there yet and I can’t worry about it until that time comes. I obsess over scrabble, I guess we all have our little obsessions. I love to spend hours looking for places to play a word. I guess others would see that as silly or unhealthy as well but I enjoy it. Maybe money is her scrabble game, the fun is in the hunt for the next best word/moneymaker.
I remember when I quit my job to start my business… It was a job paying around $35K a year, and I went to earn around $15K a year with my starting business… But I was so much happier, because I was doing what I loved, and I really didn’t care about what other people thought.
Today I earn around $65K a year with my business, almost doubled the job I quit, but it’s not what makes me happy. Of course it allows me to have more commodities and less money-related stress, but my happiness is based on doing what I love, on being who I am. I don’t even feel that I’m working, every day starts and ends with a smile for me, I can smile on the streets, I have very little stress.
My friends and family don’t even know what I earn. It’s funny because they are so obsessed with money that they always try to gather information on how much I earn, how much I paid for this and that, how much I pay for rent. But I never answer those questions, for me they are not appropriate, I feel like they are trying to put me on a value. They sometimes say I’m rich, or attack me saying I’m poor trying to get some ideas… I don’t understand what the obsession with money is.
I’m even getting a bit distant from them because they always talk about money, when I go to have dinner with them they cannot talk for more than 30 minutes without money appearing as the main subject, how happy they would be with x amount of money, how happy the people in the TV who earn millions might be…
It’s like they don’t enjoy the moment. I remember one day, we were all having Christmas dinner with family and extended family, for me it was a great moment, there were my little cousins running around, it was such a perfect moment. Suddenly, someone said ‘What might [insert famous millionaire here] be doing now? He must be really enjoying this Christmas with all his money, in some big house’.. I just didn’t say anything, I smiled and walked somewhere else… I was like ‘are you kidding me? Aren’t you enjoying this?’…
Money is such an obsession to some people, wonderful moments of life just happen in front of them and they can’t even see them.
Another great post FB. I really enjoy reading your posts because you explore all different angles of personal finances. They really make you think. I am a bit obssessed with money, but I don’t let it rule my life. I have other interests and things that are important to me. Health is number one. If you don’t have it, then you can’t even work as much as you wanted to. To me, health is wealth.
Money can buy happiness to a certain extent. Don’t worry about ritzy neighbours because you have many choices about what you want to do and where you want to live. You don’t have to spend it on stuff, you can spend it on experiences. Money gives you more freedom and more choices. It’s not everything though. Health is so important as are personal relationships. Sometimes the sacrifices like working long hours just aren’t worth it to some people but to others it is! Don’t fear making more money just don’t let it rule your life!
http://goo.gl/bqbjA
Interesting post. I was always of the mindset that money could buy happiness, but lately, I’m not so convinced. I have friends who have recently come into quite a bit of money & like your brother, they are always thinking of what to buy next & worrying if their house measures up to their ritzy neighbors – it’s getting a little out of control! I’d rather not be bothered by those kind of “problems”.
This is a great post–another reason why I am scared of making more money. On the flipside, I have since moved from NYC back to Atlanta and the difference in pay is disappointing. Grass is always greener I suppose.
Interesting take. I don’t make a ton of money and I honestly don’t think I’d be happier if I made more. I think once you’re at a place where you don’t need ‘stuff’ to fulfil you, you’ve found the ticket to happiness. Once you make a ton and the stuff comes easy, as seems to be the case with your brother, you keep wanting more and more and nothing makes you happy. I don’t ever want to be in that mindset.
I’m unapologetically obsessed with money.
I live in LA and made $72K at the time I was laid off. My car was paid off and I lived in a simple one-bedroom apt but in a nice location. I would have to say that I was very comfortable. I was able to spend money, and save a good amount of money. So for me that would be my goal to AT LEAST just get to that point again.
Good article. I have never made $30,000, but I think that would be a threshold I could be happy in based on current prices and personal situation.
I agree with their being thresholds on both ends and found the more you make, the more you are likely to spend for something just because you can or because you are in a peer group and feel the need to keep up with them.
When I was working 60-70 hours a week a made more money, but I never had any time to enjoy it as I had no free time. I spent more because I would eat out or buy food at the convenience store because I was too tired to shop for groceries and drop off items at the dry cleaners that could have been laundered as I didn’t have time to wash and press them – in the long run I really was not coming out ahead financially.
Another part is your attitude toward your situation in the choices you make. Ambition, goals and yearning for something spurs you to want to achieve and that is a good thing if it is something that makes you happy; if your only goal is just to make money and think that buying things will make you happy, you end up disappointed and unfulfilled. Even if you can’t do what you want for a living, have an area of your life where you are doing what you want to do and make time for that too.
I’ve been obssesed with the pay off in the past. Constantly thinking about it, adding up in my head how much it would be reduced next month and the month after. Not so much obssesed anymore but I do still think about it quite often, wondering how I can get it gone sooner. I’ve got so much other things going on though that I have many other things floating in my head.
I dip in and out of being obsessed. Fortunately I’m out currently 🙂
how is the average salary for Canadians $33,000?
Also I’ve always heard the money threshold for happiness was $75,000 not $60,000.
salaries in Canada are a lot lower 🙁
my happiness level starts at 100K – 30 hours a week 😀
I’m always amazed at American salaries. I live in Italy and work in one of the best advertising agencies in Milan, so it’s supposed to be a top job, but I never make more than € 36000 a year (gross income). My gf earns € 12000 a year. And it was like this before talking about crisis. 40-45 hours a week.
On the other hand, we don’t have student debt (nobody would be able to pay).