The Truth About Money, Meaning, and Happiness

Source: pixabay / Chronomarchie

I’ve been thinking a lot lately about socioeconomic status—what it means, how we define it, and why so many of us seem to get it wrong.

In my journey through the world of personal finance and the FIRE (Financial Independence, Retire Early) community, I’ve noticed a curious pattern. People who, by any objective measure, grew up in financially secure households—private schools, multiple vacations a year, no worries about bills—still describe their upbringing as “middle class” or even “lower class.” It’s as if there’s a reluctance to acknowledge privilege, or perhaps a disconnect between reality and perception.

What exactly is socioeconomic status (SES)? At its core, SES is a multifaceted concept that encompasses both objective factors, like income, education, and occupation, and subjective perceptions of one’s social standing. However, research indicates that our perceived socioeconomic status often doesn’t align with our actual socioeconomic status. A meta-analysis by Kraus and colleagues in 2020 found a moderate correlation (r = 0.32) between objective and subjective SES. More than half the time, our self-assessment of our social standing doesn’t match the reality.

Why does this matter?
Our perception of our socioeconomic status can significantly influence our sense of meaning and purpose in life.

Meaning relates to how we interpret our past—the stories we tell ourselves about our experiences. Purpose, on the other hand, is about the present and future—what drives us, what we pursue, and how we find fulfillment.

Studies have shown that individuals with lower perceived socioeconomic status have a diminished future orientation, attributed to a scarcity mindset where limited resources lead to a focus on immediate needs over long-term goals. This mindset can hinder the development of a strong sense of purpose.

However, it’s not all doom and gloom. Research in the American Journal of Preventive Medicine examined over 13,000 U.S. adults and found that a strong sense of purpose is associated with lower mortality risk across all socioeconomic statuses. This suggests that cultivating a sense of purpose can have tangible health benefits, regardless of socioeconomic status.

Moreover, a study published in Frontiers in Psychology examined the impact of childhood socioeconomic status on adult subjective well-being. It found that hope and a sense of control mediate this relationship, indicating that individuals from lower socioeconomic status backgrounds can achieve a strong sense of purpose and well-being if they maintain hope and feel in control of their lives.

Another study in the Journal of Career Development revealed that individuals from lower socioeconomic status backgrounds often find meaningful work through personal values, community connections, and resilience. This highlights the importance of internal and community-driven factors in fostering a sense of purpose.

What does this mean?
Our socioeconomic status—both real and perceived—plays a significant role in shaping our sense of meaning and purpose. But more importantly, it means that our perceptions, the stories we tell ourselves about our place in the world, can either hinder or enhance our pursuit of a fulfilling life.

If we perceive ourselves as being of lower status, we may adopt a scarcity mindset, focusing on immediate needs and neglecting long-term goals. Conversely, if we perceive ourselves as having a higher status, we might feel more empowered to pursue our passions and find purpose.

But here’s the twist: it’s not about the money itself. It’s about our relationship with money, our perceptions of our status, and the narratives we construct around them.

Money doesn’t directly cause happiness. But our perception of our socioeconomic status—the stories we tell ourselves about our wealth or lack thereof—can influence our sense of purpose and, by extension, our overall well-being.

Perhaps it’s time we reevaluate not just our bank accounts, but also our beliefs about them. Because in the quest for a meaningful life, the stories we tell ourselves might be our most valuable asset.