You just need to know how to spend it.
Many years ago, Freud was asked to describe what a person should do to attain happiness. The questioner expected a complicated answer and, given Freud’s past, this was a reasonable expectation. But Freud is reported to have said quite succinctly: “Lieben und arbeiten,” or “to love and to work.” When Freud said these words, he meant to say that it was necessary to find a balance between love and work: to love what you do but not live what you do. Of course, this can be difficult, especially for those living an active urban lifestyle. How do you strike the right balance when you have deadline after deadline?
Luckily, a wave of new research in psychology is beginning to improve on the old professor’s formula. Conventional wisdom holds that money can’t buy happiness, but science disagrees. According to recent research, if you work hard and earn the right amount of money, you can buy happiness.
A group of psychologists led by Elizabeth Dunn from the University of British Columbia and Michael Norton from Harvard Business School have recently published studies that indicate the way people spend their money may be more important than how much money they earn. In fact, the National Academy of Sciences reports that people’s emotional well-being increases together with income only up to about $75,000. Once basic needs are met, including the ability to pay bills and provide sufficient shelter and food, making more money will not necessarily make you happier. Happiness tapers or levels off after $75,000 because most of us don’t know how to buy our happiness.
So how does the mind experience happiness? Studies show that people adapt more slowly to experiences than to material purchases. As opposed to material possessions, experiences exist only as mental representations. Unless you bought a rug during the life-changing trip to India, the experience exists only in your mind now. Experiences like going on a holiday, taking a day trip, going to the cinema, theater or museum require changes to a daily routine. The more changes that are made, the longer it will take to adapt to these changes. During this process, the mind forms memories. Overtime, these memories grow and can be revisited. Experiences are always open to positive reinterpretation and slowly have a tendency to become central to identity. A person’s life is quite literally the sum of his or her experiences. Simply, the more happy memories you have, the happier you are.