Are financially wealthy people happier than people who don’t have money? Yes, according to a recent research study about money and psychology. However, these psychologists also say that psychological wealth matters more than financial wealth.
Here’s a summary of the research, plus a definition of “psychological wealth.”
Psychology Research on Money and Life Satisfaction
Ed Diener, PhD, of the University of Illinois at Urbana-Champaign, and Robert Biswas-Diener, PhD, of the Centre for Applied Positive Psychology in Milwaukee, are two of the world’s leading psychological experts on happiness. They studied the effects of financial wealth on happiness, and presented their findings at the 117th Annual Convention of the American Psychological Association.
"People should avoid the trap of over-emphasizing financial matters and consider a complete portfolio of resources,” said Diener. “This will help them cope when hard times are imminent." A “complete portfolio of resources” includes both financial wealth and psychological wealth.
These psychologists cited a study that shows that people who said they had a high level of life satisfaction reported higher income, but that a larger salary did not mean they felt happier on a day-to-day basis. That is, a larger financial income was more directly related to a stronger sense of happiness than with any other factor.
Diener said this may surprise people who have long heard that money can't buy happiness. "Money is an object that many or most people highly desire and pursue during most of their waking hours," he said. "It would be surprising if making more money had no influence whatsoever when people are asked to evaluate their lives."
However, in some cases, money can create unhappiness and anxiety.
Money Can Buy Happiness – But Financial Wealth Alone Isn’t Enough
Life satisfaction is affected by salary and income, but only to a certain degree.
"Essentially, we have two forms of prosperity: economic and psychological," said Diener. "I don't know if one is better than the other. But what we've found is that while money may be able to make people lead more comfortable lives, it won't necessarily contribute to life's pleasant moments that come from engaging with people and activities rather than from material goods and luxuries."
To increase feelings of happiness, people need to spend time with loved ones and pursue life experiences that make them feel good. Life satisfaction isn’t about buying material goods or investing money to create more money…it’s about spending time with people, doing interesting, fun, and challenging activities.
Psychological Wealth Helps People Cope With Tough Times
Though financial wealth can make people happy, what really matters in difficult times is support from other people, humor and prayer, and learning new coping skills. Money helps, but it can’t soothe all of life’s slings and arrows. "Adaptation to both good and bad events is part of our psychological wealth because it helps us to move forward in life," said Biswas-Diener.
Money can buy happiness…but it may not sustain long-term life satisfaction. And sometimes, financial wealth can lead to anxiety and depression – especially if there’s evidence of financial infidelity in marriage.
Source:
American Psychological Association (2009, August 8). Father-son Team Says Positive Gains Can Be Made In 'Psychological Wealth.'
Laurie Pawlik-Kienlen - Laurie Pawlik-Kienlen is a full-time writer and blogger in Vancouver, BC, and the creator of the Quips and Tips blog series.
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