Money Talk with Nimi: Does Money Buy Happiness?Posted on Wednesday, April 10th, 2013 at 9:42 AM
By Nimi Akinkugbe
The constant message relayed in our materialistic society, that money is the most important thing in our lives and the constant desire for more, has had far reaching consequences for our societal value system and morals. This unending pursuit of money has damaged family relationships, the environment and global socioeconomic systems.
Sadly, in our consumption-driven society many of us have come to believe that all our worries would be solved if we have more money. Indeed, wealth has become the ultimate measure of who we are, and we have become defined by it. Chasing after money for its own sake can damage our value system, and we pay for it in time, health, and stress.
What does money mean to you? Do you have a healthy relationship with your money? Do you worship it? Or do you use it as a tool to achieve your goals? Does your life depend on it? Would you do anything, to get it? What really matters to you? What really does make you feel happy and fulfilled?
It is important to understand your own money personality and to put it in the right perspective. The ways in which you make money and how you spend it reveal a lot about your personality. This relates to the emotional aspects of money such as needs, values, relationship choices, feelings about earning and career choices, spending, saving, and investing. Issues of control, security, self-esteem, and a sense of well-being are always evident when money matters come up.
What do you need? Abraham Maslow was an American psychologist best known for his theory of the “hierarchy of needs” which he developed in the mid-1900s. This model served as a tool for understanding human motivation and development. He identified five levels of human needs that must be satisfied by one’s own environment in order for an individual to reach his or her full potential.
Maslow’s pyramid illustrates human needs stacked in layers with physiological needs at the base of the pyramid which involves the most basic needs; that is, what a person needs to stay alive, such as air, water, food, sleep, warmth, shelter and hygiene. At the second level, Maslow places safety, security, employment, money and financial stability, and good health. By the fifth and highest level, human beings seek self-actualization and fulfilment. We have the desire and the ability to grow; doing something that makes life complete such as supporting a cause or following a calling to realize personal potential or seeking personal growth.
Why doesn’t the lucrative promotion or the brand-new mansion in the best part of town keep us swathed in a permanent state of happiness? We like to think that if we just had a little bit more money, we would be happier, but once we attain that goal, something still seems to be missing. It appears that the more money we have, the more we want; but buying the car, boat, or bike of our dreams will only bring transient joy instead of a deep, lasting sense of fulfilment. We tend to overestimate how much pleasure we will get from having more money.
Certainly, earning more makes us happy in the short term, but we quickly adjust to a new lifestyle and all it brings. Naturally, there is a thrill in having that shiny new car, but soon most of us get used to it and start wanting the newer, more powerful model. Having made a special purchase, we immediately dream of acquiring the better, “latest” version. Scientists call it ‘the hedonic treadmill’ – and many people spend far too much time on it.
Professor Emeritus Lord Richard Layard, Director of The Centre for Economic Performance at the London School of Economics, in his book Happiness: Lessons from the New Science, he discusses the relationship between happiness and rising standards of wealth. A critic of consumer society and the all-consuming pursuit of money, he suggests that we eventually get trapped on the “hedonic treadmill”: Our happiness begins to wane as we start to take the new positive changes in our life for granted.
Money can bring happiness but for the most part it is temporary. A dramatic change in wealth such as the move from abject poverty to financial security can significantly increase happiness, but satisfaction will be transient; its effect will only last until the beneficiary gets used to the new status. Layard argues that once poverty and discomfort have been eliminated, extra income is much less important than human relationships. So how do we step off that hedonic treadmill?
Having spent several years interacting with people with various levels of wealth, I am convinced that money does not in itself create or sustain happiness. It certainly buys very nice things and does improve the quality of life and a standard of living. Yes, money is important, as it helps you to pay your bills, to educate your children, support your family and so on; but if you rely upon it as the key to happiness, it can be illusory as it does not always address life’s real issues, such as, concern for your family, problems in relationships, and work-related stress.
Money can buy food, shelter, education, and experiences, and it pays for healthcare and day-to-day comforts. Of course if you don’t have enough money to send your children to school, can’t provide for your elderly parents, or can’t afford costly surgery that can alleviate the pain from an old injury, it would be hard to be happy. In that sense, money can buy happiness by eliminating some worries and bringing quick relief to financial concerns.
Beyond that, longer-term happiness is dependent upon your personality and on realising how fortunate you are to have the things that truly matter in life: a strong relationship with God, a loving family, good reliable friends, good health for yourself and your loved ones, a fulfilling and secure job, a thriving business, a safe environment, moral values, and freedom. Next to these things all the money in the world pales into insignificance.
Happiness comes from giving.
Having money is a great responsibility because it enables one to do things for others. Material possessions eventually lose their sparkle then beg to be replaced. Yet, one can make transformational gifts by helping others and even shaping or saving lives. It is through generosity that one can attain the best relationship with money. By deciding to make a difference in someone else’s life, you can give much more meaning to your own. The joy that this brings is by far the most lasting form of happiness.
Photo Credit: redorbit.com
Nimi Akinkugbe has extensive experience in private banking and wealth management. She is passionate about encouraging financial independence and offers frank, practical insights to create a greater awareness and understanding of personal finance and wealth management issues. She is married with 3 children.Find out more via www.nimiakinkugbe.com