Money, Time, and Happiness

 

Everyone goes through their lives pondering many basic questions that they probably won’t ever know a definitive answer to. One specific question that is wondered about by many is whether money can buy happiness. I have looked into this question and found that it should really be made broader. Money affects too many aspects of our lives to look at this topic through such a narrow lens. Instead you need to look at not only money, and happiness, but what people do with their time. So my refined question that I’m looking to answer in this essay is, how can we use what money and time we have in order to be happy, productive people?

To see how time affects money and happiness, first simplify it, and just look at how money and happiness interact. A lot of people just research this correlation between money and happiness. Which does have a correlation, but probably not as much of one as you would think. Money and happiness has its largest correlation right up to the poverty line. When the poor get more money they get reasonably happier, because for poorer people more money means that they can afford more comfort and that makes their lives dramatically happier (Gardner, Gilberts). What is described here are people’s happiness levels rising directly with their income levels. Gilbert’s take on this is slightly drastic, he says, “Economists explain that wealth has ‘declining marginal utility,’ which is a fancy way of saying that it hurts to be hungry, cold, sick, tired, and scared, but once you’ve bought your way out of these burdens, the rest of your money is an increasingly useless pile of paper.”(Gilberts). I don’t necessarily agree with Gilberts when he says that extra money is useless. Of course it is possible for extra money to go to waste, but there are certainly ways that extra money can be spent that will assuredly result in some happiness.

What Dan Gilbert says is supported by a number of different studies. One such study, conducted by Ed Diener and Robert Biswas-Diener addresses the same correlation of money and happiness, mainly happening in poorer nations. As they started to look at the wealthier nations, they saw the correlation and trends drop away (Biswas-Diener, Diener). Again what we are seeing is a rise in happiness as people begin to meet all their basic needs, and then things stall out when they get more money than needed. Why is this? Partially because of the “declining marginal utility” mentioned by Gilbert, but also, as studies have shown, because you aren’t using your money to help other people. This might be a shock to some because most people would think that the more money they spent on themselves, the happier they would be. But scientists Dunn, Atkin, and Norton have proved that thinking to be false. They tested their hypothesis that, “…how people spend their money may be at least as important as how much money they earn.” What they found in their experiments was that participants who were given money and told to spend it on themselves reported lower happiness levels than participants who were given the same amount of money and told to spend it on friends and family (Atkin, Dunn, Norton). This is another piece of the puzzle that is our happiness. It shows us that when we make excess money we are less likely to enjoy it because it is likely to end up being spent on yourself instead of loved ones.

There is one deviation that changes the results of the arguments I have already presented. This deviation is when money is gained in a sudden windfall. That is, when someone gains a lot of money really quickly through something like the lottery or inheritance. People who have gotten one of these windfalls have shown a higher mental wellbeing in the following year (Gardner). The question of whether this wears off after that year or not is untested. However, given that this study does show that the windfall amount is directly related to the happiness increase, it might be safe to assume that the amount of happiness will decline proportionally to the money declining. This deviation brings up another important question. Why do people enjoy money in excess when it is given to them but not when they have to work for it? One of my theories on this is that, when it is given to them, they value it less. They didn’t work very hard to get it so they aren’t that sad when they start to spend it. If this is true, than it is likely that much of this windfall spending isn’t actually spent on the person who actually won it. Since they have already had so much good fortune, the person feels the need to share. There it is, people who get windfalls are happier because they are more likely to use it and share the love by spending it on family and friends. Of course there aren’t any experiments to back up these hypothesis, but that’s just what makes sense to me given the information, that was collected through experiments.

Now that we have seen how money and happiness affect each other individually, we need to take a closer look at the time component, which complicates things even further. The way that we view money, has a weird effect on our time. Researchers Julian House, and Stanford DeVoe experimented with the idea that putting a dollar value on one’s time devalues it. In other words, knowing that you can make fifteen dollars an hour makes doing anything besides making fifteen dollars an hour less worth it. So because we understand we could be profiting from our time we would rather not waste it, “Experiment 1 demonstrated that thinking about one’s income as an hourly wage reduced the happiness that participants derived from leisure time on the internet” (DeVoe, House) This to me, explains more perfectly why people’s happiness levels don’t just continue to rise with their income. It also offers another explanation to why people are happier when they are given a bunch of money as to when they work for the same amount of money. Time complicates everything because it is a fleeting resource that we can’t get back, so we know while we can always make more money we can’t ever get our time back.

So with all the research and the results of all the experiments conducted I believe the easiest way to be happy with ourselves is to worry less about money. As long as you aren’t struggling to get by day in and day out, then a small amount of money isn’t really going to make that much of a difference, in the grand scheme of things. I believe we can be truly happy if we just value our time and the people around us who love and care about us. Money can do a lot, but it won’t be there for you when you’ve had a terrible day and need someone to lean on. So to be happy we need to be less materialistic and more focused on companionship.

 

 

 

 

 

 

 

 

References

Biswas-Diener, Robert, (the other other is Ed Diener) “Will Money Increase Subjective Well          Being?” Kluwer Academics Vol. 55 Num 1. (2001): 35-40. Web.

Devoe, S. E., J. House. “Time, money, and happiness” (2011): n. pag. Journal of Experimental and Social Psychology. Web. 11 Nov. 2014

Dunn, E. W., L. B. Aknin, and M. I. Norton. “Spending Money on Others Promotes Happiness.”     Science 319.5870 (2008): 1687-688. Web. 11 Nov. 2014.

Gardner, Jonathon. “Does Money Buy Happiness?” A Longitudinal Study Using Data on                    Windfalls Web. 11 Nov. 14.

Gilberts, Daniel. “Reporting Live From Tomorrow.” Stumbling on Happiness. Web. 11 Nov.    2014