About Happiness.

Have you ever noticed how waiting for an upcoming vacation is exciting whereas waiting for a purchase you made on Amazon is annoying?  We describe ourselves as “impatient” while waiting for goods and services and “excited” while preparing for our vacation.  In both cases, we are spending money, however an experience may seem to create more joy than a good or service.

With this in mind, let’s talk about money and happiness.  Study after study has continued to emphasize earning between $60,000 and $75,000 gives us a sense of emotional well-being[1].  As income continues to rise, there is a direct correlation between income and consumption (referred to as the “Marginal Propensity to Consume”).  Once personal income increases beyond $95,000, we actually find a negative impact on our overall happiness.  As the phrase suggests, “more money, more problems.”  This can be explained many different ways – suffice it to say more consumption does not lead to more happiness.

Why then do we continue to consume in this never-ending search for complete and utter fulfillment?

The answer is found in what Brickman and Campbell refer to as the “Hedonic Treadmill” or “Hedonic Adaptation.”  It’s our innate, endless need – or rather want – to continually buy more and more in an attempt to crave less and less.  The problem?  Our wants lead to additional wants, more expenses, less money, increased frustrations, and most importantly, no increased contentment.  The perceived excitement we briefly experience quickly fades to leave us craving more.

How then do we decide where to make changes which will create the biggest impact in our emotional well-being?  One place we continually cite as a major source of our collective stress: money.  According to a 2018 study[2] comparing Generation Z to all adults, the four common sources of stress were Work, Money, Health-related Concerns and the Economy.  The commonality across all four – financesWe know the problems, we know the reasons, now let’s focus on the solutions.  As we consume more and more there is a negative, direct and measurable impact on our financial wellness.  However, it’s not enough to simply spend less – we also must save more.  Both points sound so plainly obvious, and yet we counter-productively and compulsively do the inverse.

Let’s commit to each other to do this:

  1. Create (and Stick to) a Budget
  2. Want Less
  3. Save More
  4. Find Joy

As we make our plan, let’s also remember to Plan with a Purpose.  There needs to be a thoughtful strategy to our Plan that actually helps us to achieve our overall goals.  Keep in mind “Plan” is both a noun and a verb, so make sure to create a literal Plan as well as to continue to refine it by planning.

Budgets are a starting point for us to assess our ins and outs.  Without monitoring our expenses, we can never establish a baseline for our progress.  Most of us work well with gamification – the application of some form of competition to encourage a specific outcome.  By setting goals for ourselves, we begin to form intentional behaviors (i.e. deliberate spending rather than unnecessary consumption) which lead to long-term habits.

Once we establish a budget, our next goal is to find a way to want less.  In a world constantly promoting consumption, it becomes an increasing challenge to resist the temptation of spending.  Now that we know purchasing goods and services does not lead to contentment, the simple awareness of this fact can help us to form more realistic opinions about what we want versus what we need.  Furthermore, since more possessions lead to more stress and frustration, perhaps we can compel ourselves to simply do with less.

We have our budget and find ourselves wanting less, now what shall we do with our newfound surplus in cash flow?  Save more.  One of the leading causes of our stress and anxiety is money.  If money becomes less of a source of anxiety, we can effectively bridge the gap between financial stress and financial freedom.

Although our journey is only just beginning, we have crossed the three biggest challenges and are working towards our ultimate goal – finding joy.  As we survey our domain, let’s view everything through the lens of satisfaction.  If we see items in our homes that do not bring us a sense of joy, we should make the conscious decision to justify them remaining in our homes.  Our goal is not to become minimalists, but rather functionalists within our own lives. 

In our final stage, we overcome our financial anxieties by creating a plan established for the primary purpose of achieving financial freedom and eventually…finding joy.


[1]Jebb, A., Tay, L., Diener, E. & Oishi, S. (2018). Happiness, income satiation and turning points around the world. Nature Human Behaviour, 2, 33–38. Retrieved from Nature Research Website: https://www.nature.com/articles/s41562-017-0277-0
[2]American Psychological Association. (2018). Stress in America: Generation Z. Retrieved from American Psychological Association Website: https://www.apa.org/news/press/releases/stress/2018/stress-gen-z.pdf