Your Money: The Missing Manual!

You don’t want to be rich—you want to be happy. Money can certainly help you achieve your goals, provide for your future, and make life more enjoyable, but merely having the stuff doesn’t guarantee fulfillment.

"Happiness, not gold or prestige is the ultimate currency.”

—Tal Ben-Shahar

How Money Affects Happiness

The big question is, “Can money buy happiness?” There’s no simple answer.

It seems natural to assume that rich people will be happier than others,

 But “Money is only one part of psychological wealth, so the picture is complicated.”

There is a strong correlation between wealth and happiness. Rich people and nations are happier than their poor counterparts; don’t let anyone tell you differently. But they note that money’s impact on happiness isn’t as large as you might think. If you have clothes to wear, food to eat, and a roof over your head, increased disposable income has just a small influence on your sense of well-being.

So, yes, money can buy some happiness, but as you’ll see, it’s just one piece of the puzzle. And there’s a real danger that increased income can actually make you miserable—if your desire to spend grows with it. But that’s not to say you have to live like a monk. The key is finding a balance between having too little and having too much—and that’s no easy task.

The Fulfillment Curve

More spending does lead to more fulfillments—up to a point. But spending too much can actually have a negative impact on your quality of life suggest that personal fulfillment—that is, being content with your life—can be graphed on a curve that looks like this:

This Fulfillment Curve has four sections:

·         Survival. In this part of the curve, a little money brings a large gain in happiness. If you have nothing, buying things really does contribute to your well-being. You’re much happier when your basic needs—food, clothing, and shelter—are provided for than when they’re not.

·       Comforts. After the basics are taken care of, you begin to spend on comforts. These purchases, too, bring increased fulfillment. They make you happy, but not as happy as the items that satisfied your survival needs. This part of the curve is still positive, but not as steep as the first section.

·         Luxuries. Eventually your spending extends from comforts to outright luxuries. These things are more than comforts—they’re luxuries, and they make you happy. They push you to the peak of the Fulfillment Curve.

·         Overconsumption. Beyond the peak, Stuff starts to take control of your life. But none of this makes you any happier. In fact, all of your things become a burden. Rather than adding to your fulfillment, buying new Stuff actually detracts from it.

The Sweet Spot on the Fulfillment Curve is in the Luxuries section, where money gives you the most happiness: You’ve provided for your survival needs, you have some creature comforts, and you even have a few luxuries. Life is grand. Your spending and your happiness are perfectly balanced. You have enough.

Unfortunately, in real life you don’t have handy visual aids to show the relationship between your spending and your happiness; you have to figure out what enough is on your own and seek balance to understand goals and values in the life!

It’s Not about the Money

If vast riches won’t bring you peace of mind, what will? --- A balanced life is a fulfilling life! This choice will, in turn, help you live a happier life.


For another attempt to quantify well-being, take a look at this happiness formula from Dilbert creator Scott Adams: http://tinyurl.com/happy-dilbert.

[Note: For an Excellent Look at how to be Happy, don’t forget to pick up a copy of Gretchen Rubin’s The Happiness Project (Harper, 2009).]