If you ask the person on the street whether they’d be happier if they won a large sum at the lottery, they’d be almost sure to say yes. People also generally believe that, having a well-paid job and living in an expensive house in a chic area are other fonts of happiness.

But if we look at life in the Western World over the past 50+ years every single aspect concerning money and what money can buy has rocketed upwards. Inflation-adjusted income has just about tripled, the size of homes are almost double and most adults own cars – a dream just two generations ago (G. Easterbrook). 

But the level of happiness has remained identical - only one-third of Americans described themselves as “very happy” (American National Opinion Research Center) both in 1950 and today.

Worse still is the raising incidence of depression since 1950. Depending on definitions, depression has increased by 3-10 times during this period.

Most people lead their lives pursuing things that money can buy rather than creating an engaging and fulfilling life. Although everyone knows that “money can’t buy happiness”, the facts show people acting as though expensive purchases are “shortcuts to well-being” (M. Seligman).

Rutt Veenhoven gives evidence that having an income of below about 8,000 euro/year causes frustration, stress and consequentially unhappiness. But above this level, money and happiness do not seem to go hand in hand.

What appears to be happening is something psychologists call reference anxiety – or put more simply, “keeping up with the Joneses”. People forget how well off they are because they are too caught up with comparing themselves to others. Instead of asking “does my house meet my needs?” the person living in a two bedroom house in a neighbourhood of one bedroomed houses will be happy, and the same two bedroomed house will be a font of shame and unhappiness in an area of three-bedroomed houses. Television and Internet are also guilty of putting the richest people’s possessions and super life-styles into everyone’s living room.

Paradoxically it’s the very increase in money, which creates the wealth so visible in our western society, that causes dissatisfaction. More money triggers more desires – and there’s no end to one’s longing. Why not?

Simply because people tend to get used to their higher status, bigger car, better job, very quickly indeed. The nice warm inner pleasure dissipates fast, leaving time to look around again, to see what the Joneses are up to. We often fail to appreciate what we have.

People’s expectations about their future may have more influence on their sense of well-being that their current state does. Those living modestly but anticipating better days to come are likely to be happier than people living well but not looking forward to improvements in their living standards.

One final reason why money can’t buy happiness is simply because the things that really matter are not up for sale. Love, friendship, family, respect, a place in the community, the belief that your life has a purpose - those are the vital ingredients of happiness. So if to work, to earn and to spend are your principal goals, don’t wonder if you’re still not happy!

Norma C. Stuart
Feb. 2005