Can't Buy Happiness?

Money, personality, and well-being

You've Got to Face It to Erase It

Individuals who manage their money are more satisfied with their lives.

Recent research into the age-old question “Can Money Buy Happiness?” has resulted in some intriguing results. There is now empirical support linking several specific financial strategies to increased happiness and life satisfaction. These suggestions include delaying gratification, savoring positive purchase memories, making purchases that satisfy needs as opposed to desires, purchasing life experiences as opposed to material objects, and, ultimately, spending money in ways that increase psychological need satisfaction as well as in ways that are central to the self.  

Face it to Erase it!
You've got to Face it to Erase it!
Also, in today’s world, many consumers do not manage their money well and end up suffering from overwhelming levels of debt. Prominent financial counselor, Suze Orman suggests that "You've got to Face it to Erase it", referring to the need to start looking at and managing your debt.

Students in my lab were interested in determining if how one manages their money can also influence happiness. To answer this question they examined people's responses to several money and happiness quizzes completed by members of the BeyondthePurchase.Org community.

Results indicated that how an individual handles their money (i.e., do they repay credit card debt on time, track their purchases, or save money regularly?) had a great influence on their feelings of security. Also, when people felt more secure, they experienced increased happiness and life satisfaction. Specifically, we determined that individuals who manage their money were happier, more satisfied with their lives, and experienced less negative emotion. 

"Our findings suggest that dealing with credit card debt and loans has the biggest impact on happiness," says Grant Donnelly.

Has your credit card or student loan debt gone unchecked? Developing a repayment plan might not only improve your financial situation, but might actually make you happier as well.  

Beyond The Purchase is a website dedicated to understanding the psychology behind spending decisions and the relationship between money and happiness. We study how factors like your values and personality interact with spending decisions to affect your happiness. At Beyond The Purchase you can take quizzes that help you understand what motivates your spending decisions, and you’ll get personalized feedback and tips. For example:

How do you score on the five fundamental dimensions of personality? Take our Big Five personality test and find out.

How do you feel about your past, present, and future? Take the Time Attitudes Survey and learn about your relation with time.

How happy are your Facebook updates? We can analyze your last 25 Facebook status updates and determine how happy you have been.

How happy is your subconscious? Take our Happiness IAT and find out.

With these insights, you can better understand the ways in which your financial decisions affect your happiness. To read more about the connection between money and happiness, go to the Beyond the Purchase blog.

Ryan T. Howell, Ph.D., is an Assistant Professor of Psychology at San Francisco State University.

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