11 Key Insights from Gretchen Rubin’s The Happiness Project - EDC 2016

Insight 7

Money can’t buy happiness, but it can buy many things that contribute mightily to happiness.

“Whether rich or poor, people make choices about how they spend money, and those choices can boost happiness or undermine it.”

Although many people make the argument that “money can’t buy happiness,” Gretchen was skeptical of this quick dismissal of the significance of money—and indeed, research shows that “people in wealthier countries do report being happier than people in poorer countries, and within a particular country, people with more money do tend to be happier than those with less. Also, as countries become richer, their citizens become less focused on physical and economic security and more concerned with goals such as happiness and self-realization.”

And yet, the relationship between money and happiness is a complicated one. In many instances, relative wealth is more influential to happiness than absolute wealth. People tend to compare themselves to those around them; their satisfaction is affected by where they rank. Making more money than others in their age group tends to make people happier, and conversely, living in a neighborhood with richer people tends to make people less happy than if their neighbors have the same income.

When Gretchen suffered a nasty back spasm, it occurred to her that money was like good health: neither guarantees happiness, but both help facilitate it. “When money or health is a problem, you think of little else; when it’s not a problem, you don’t think much about it. Both money and health contribute to happiness mostly in the negative; the lack of them brings much more unhappiness than possessing them brings happiness.”

One successful strategy is to make “modest splurges” on behalf of your larger happiness goals. Spending money on a party for your sister, for example, helps cultivate family relationships. A salad may cost you more than a bagel, but it could help promote a health goal. But modest splurges should be done in moderation. Gretchen explains that, “Scrimping, saving, imagining, planning, hoping – these stages enlarge the happiness we feel.”

Also, remember to “spend out” — that is, keep things in circulation. Too often we hold on to money or items, thinking we’ll need them for other, more special, occasions. But not using things is the same as wasting them.

“In one of the last visits to my grandmother before she died, I picked up the My Sin perfume that had been sitting on her bureau for as long as I could remember. The bottle was still in its box, and when I opened it, I saw that it was still full to the top. I didn’t ask her about it, but I’m sure someone, many years ago, gave her that bottle of perfume and she was “saving it.” For what? After she died, I took the box home with me, and I keep it in my office to remind me to “Spend out.”

VIDEO 7: Watch Gretchen talk about how money influences our happiness.