Ulterior Motives

How goals, both seen and unseen, drive behavior

What makes me happy is that I make more money than you

You naturally compare yourself to others when judging happiness.

Monopoly guyMost people have a conflicting set of beliefs about money and happiness. On the one hand, most people will say that money doesn't buy happiness. On the other hand, if you have worked at a job for a long time, you can be quite frustrated if you don't get a raise. In fact, when you pay your monthly bills, you may feel like you'd be much happier if you just made a little more money than you do.

Of course, if you're working you have probably gotten lots of raises over the years. When you get that first paycheck after the raise, you probably feel pretty happy. But that happiness seems to fade over time.

So, what is the relationship between the amount of money you make and your happiness.

Chrisopher Boyce, Gordon Brown, and Simon Moore addressed this question in a paper that appeared in the April, 2010 issue of Psychological Science. They analyzed the data from a large-scale study of well-being in Great Britain. This survey collected ratings of how satisfied people were with their life from over 86,000 people. In addition, the survey obtained information about income, age, gender, and education.

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Does making more money make you happier?

There is a correlation between how much money people make and how happy they are. But, what really seems to explain people's life satisfaction is not the particular amount of money they make, but how their income compares to what their peer group makes.

Dollar signsThat is, people seem to compare themselves to others of the same general age, gender, and level of education. People who make more money than those in their reference group are generally happier than those who make less than those in their reference group. It isn't enough just to make a lot of money, you need to make more than the people to whom you compare yourself.

It is important to place this work in context, though. Money is just one influence on people's satisfaction with life. There are a number of other factors that are also quite important. For example, health has a huge impact on life satisfaction. If you are not healthy, you are not happy. In addition, your relationships with your family matter. For example, married couples tend to be happy both before and after having children, though their happiness while they are raising kids goes down due to the stresses of being a parent.

What does this mean for you? Perhaps the most straightforward thing you can do is to try to keep yourself focused on whether you have enough money to do what you would like to do rather than on the amount of money that the people around you make. That is not easy of course. If your neighbor comes home with a nice car, it is easy to feel a pang of jealousy. If a friend goes on a fantastic trip, you might wish you could do the same. But unless you're lucky enough to be making more money than everyone around you, you might be best off just focusing on the joys of what you have.

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Art Markman, Ph.D., is a cognitive scientist at the University of Texas whose research spans a range of topics in the way people think.

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