Happiness on a Budget

The other week WalletPop had a post Want happiness? Forget money – get therapy instead in which was explained that money can’t buy happiness, unless you spend it on psychotherapy.

Perce_cliff_house This was based on a study (discussed a little more completely here but not, as far as I can tell, available on the web) done by two British professors. They found that £800 worth of therapy was the happiness equivalent of a pay rise of £25,000.

Alas, this was not experimental science. As much fun as it would have been, the researchers did not choose people at random and give them piles of cash or toss them onto the couch. All they did was find that people who themselves decided to get therapy experienced the same increase in self-reported happiness as those that got a big raise.

The authors use this finding to argue that law courts should not compensate people for pain and suffering with mere money. Instead, they should be given time with a qualified therapist.

Needless to say, both researchers are professors of psychology.

Studies like these invite us to make the rather commonplace observation that money doesn’t make us happier, or at least not by as much as we seem to expect before we get it. And yet we all know that money has got to make us a little happier. Cautionary tales of lottery winners notwithstanding, nobody would really turn down a gift of a large sum. That can only mean that we all know we’d be at least a little bit happier with the money than without.

But the larger point, that wealth is not the ultimate indicator or driver of happiness, that there are plenty of happy poor folk and miserable rich ones, is as valid as it is obvious. Has anybody ever really argued otherwise? Sure, we would always prefer more money to less, but that does not mean that material gain is the sum total of our desires in life.

We, and I am speaking of humans in general and Americans in particular, are an industrious and ambitious lot. Yes, we like our leisure time in front of the good old 50" flat screen TV, but we spend a lot of time on that thing we call work. And we work in amounts that are far in excess of what is biologically necessary. If our only concern was acquiring the amount of food, clothing, and shelter needed to keep us alive, most of us would hardly work at all.

So why do we work so much? Contrary to what we like to tell each other, it’s not, exactly, for the money. The money is important, but the earning of it is as important to us as the spending or saving. What we make is, to quote a cliché from decades past, how we keep score.

And the state of being without work, unemployment, is only secondarily an economic problem for most of us in it. I was reminded of this by an interview with Jason Reitman, director of Up in the Air, a movie about a guy who lays people off for a living. As research, he interviewed some actual unemployed people and had a revelation that might not have been so surprising to somebody who had ever worked outside Hollywood.

"If you’d asked me before I did this movie, ‘What’s the worst thing about losing your job in this type of economy?’ I would’ve probably said the loss of income," Reitman explains. "But as I talked to these people, that rarely came up. What people said, time and time again, was: ‘I don’t know what I’m supposed to do.’ … It was really about a lack of purpose. They would say, you know, ‘After I finish this interview, I’m going to go get in my car, and I have nowhere to be.’ And I can’t imagine thinking that every day."

Having someplace to go every day makes us happy. Doing whatever it is that we do there well makes us happier. And getting paid a whole lot of money, with which we can buy cool stuff and, as necessary, psychotherapy, makes us happier still.

Of the items on the very long menu of things that bring happiness, therapy is not the most cost effective. Work is. Not only doesn’t it cost money, they actually pay you. Usually.


  • By Rob Bennett, December 7, 2009 @ 2:22 pm

    Having someplace to go every day makes us happy.

    Absolutely. That’s it.

    Money can add to our chances of being able to do productive work. So money can help make us happy. But money can also distract us from doing meaningful work and thereby make us less happy.

    Freud saw this, by the way. He said there are two secrets to happiness — love and work. He didn’t say there were three — love, happiness and psychotherapy.

    If psychotherapy is done right, it leads to you realizing that you need to love and you need to work and it makes you more happy than you were. If it is done poorly, you spend the rest of your life thinking about your troubles and never overcoming them.


    And work.

    The hard part is not figuring it out. The hard part is not accepting that something so simple could be the answer in this complicated world of ours.

    It’s all about love and work. Anything that takes your attention away from those two is a negative.


  • By Wm Tanksley, December 7, 2009 @ 3:17 pm

    Dang. That’s just about the deepest thing I’ve ever read on this blog, and at the same time the easiest to understand. Nice.

    I also wanted to repeat a saying my dad passed on to me… “Money can’t buy you happiness but it does bring you a more pleasant form of misery.” (The Internet says Spike Milligan said that first.)


  • By Neil, December 7, 2009 @ 3:24 pm

    While I can see that having no place to be might be somewhat depressing, I would argue that having no place to be isn’t because you’re unemployed, it’s because you lack imagination. If I were to lose my job tomorrow, it would be at least a month before I ran out of my backlog of non-paying work. And don’t think I couldn’t find more. If a lack of activity is what is making the unemployed depressed, then they really should get off their asses and do something about it.

    Because I actually bother to plan my finances, I was able to use my last bout of unemployment to visit a few dozen countries. Since I’m no longer a renter, I’m a bit more tied down now, but there’s still plenty to keep me busy around home, and won’t cost me a cent.

  • By Larry, December 7, 2009 @ 4:22 pm

    Phooey. I agree with Tevye from Fiddler on the Roof:

    Perchik: Money is the world’s curse.
    Tevye: May the Lord smite me with it. And may I never recover.

  • By CalLadyQED, December 7, 2009 @ 5:03 pm

    I’ve tried to identify the cultural assumptions/ideas/attitudes that make up the American Work Ethic:

    1) The puritan work ethic: the idea that work is good and God-glorifying and that everyone must work.

    2) You have the freedom to choose career paths you enjoy and to work wherever you want. You can and should demand this freedom.

    3) People can and should do many things in sacrifice for the good of others, but your work must benefit YOU. You have to be getting something out of it.

    3) You should love doing your work and work doing what you love.

    4) Your career/vocation is part of who you are and how you interact with the world at large. I.e., your work is part of your identity. (Hence, determining your calling is extremely important.)

    5) Your wage, education, job title, career, etc. determine your social status; i.e., your worth compared to others is measured largely by your job and things directly related to it. (We no longer value non-wage-earning jobs like 19th century farming was.) “What we make is[...] how we keep score.”

  • By TJR, December 7, 2009 @ 6:33 pm

    You can also read the story as “people wait too long before they finally undergo therapy.”

  • By Atticus, December 8, 2009 @ 12:07 am

    Great post. Thought you were going to go a different way and point out that people ard up enough to go to shrinks are probably among the people most likely to benefit from therapy. This was better.

  • By Tyler, December 8, 2009 @ 2:16 pm

    Money doesn’t buy happiness, but as someone who grew up well below the poverty line, I can say that not having any can make as miserable as anything in the world.

    As far as the unemployment thing goes, I totally agree with you. I got laid off a little more than a month ago from my first job out of college. The company was in bad shape so I was expecting it for a bit and prepared myself financially (as good as I could considering I’m not even 23 yet and had only been there 6 months). I can make it another 5 months without a job probably and be OK financially, but I’m going crazy for the other reasons.

    For some reason I seem to lack the kind of motivation I had when I was employed, getting less accomplished all day than I did in my time after work. Also, visiting home for Thanksgiving, I was hoping to be the guy who got out of town with the great new engineering job, not the unemployed guy.

    Good post.

  • By Guzzo, December 12, 2009 @ 9:15 am

    The “real” reason why I work? My wife makes me.

  • By ETF Guy, December 21, 2009 @ 8:05 pm

    Money is an enabler. What you do with it is what determines if you’ll be happy or not. But that’s no different than anything else. Your job has the potential to make you happy unless you ruin it. Your spouse has the potential to make you happy unless you’re a jerk. And your family has the potential to make you happy unless you don’t do your fair share.

    Happiness is also fleeting. If something makes you happy today, that doesn’t automatically mean you’ll be happy tomorrow. So when they say that you return to your normal level of happiness after receiving a sum of money, that’s hardly insightful. It’s the same with your job that needs to be fulfilling everyday, your spouse that needs to be nice to you everyday, and your family that needs to support you everyday.

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