19.01.2021
How "Yale's Most Popular Lecture" changed the way you spend your money
"You can't buy happiness with money." For most of my life, I believed that this idea could not be justified. Anyone who says that a million dollars will not make them happier is probably mistaken, writes Dave Schools.
Money gives you more control over your life, the freedom to retire early, the security to support yourself and your family, the comfort of buying things and experiences that excite you, the ability to say yes when your friends invite you to dinner ... and the list could go on and on.
So when Yale posted his lecture on happiness for free online, Scholes decided to give it a try.
The New York Times called it "the most popular lecture in university history," and hundreds of people who reported changes in life after it convinced me. Maybe it will change the way I spend and think about money,” says Scholes.
The 10-week course, entitled Welfare Science, is led by Lori Santos, a professor of psychology and cognitive science. She begins the lesson by asking why what we want in life doesn't really make us happy.
The culprit is a phenomenon called "wrong desires" and refers to the idea that people sometimes "incorrectly predict" how much they will enjoy something in the future.
Money is happiness. Is it?
Santos mentions several "annoying traits of the mind" that make us pursue things that don't really make us happy. Many of the materialistic goals we pursue have little or no effect on our overall satisfaction with life, Santos said. One of the main misconceptions he turns to is money.
To prove his point, Santos cites a well-known Princeton study from 2010. Researchers analyzed the responses of 450,000 Americans who were interviewed about things like their income and whether they live the best possible life for them. The data show that while happiness does grow with income, the correlation peaks at about $ 75,000 a year.
The problem with this study, however, is that it was published almost a decade ago. Since then, the idea that money does not buy happiness has been refuted by a number of researchers. For example, a 2012 study by the Skandia International Wealth sentiment Monitor found that global "happiness income" was much higher at $ 160,000.
And a more recent Harvard study from 2018 found that "great wealth really predicts greater happiness" - for millionaires. The researchers found, "consistent evidence that several higher levels of wealth are not associated with higher wealth, but significantly higher levels (net worth $ 8 million or more) are associated with modest wealth." Although most of us are not millionaires, there is still enough data to suggest that happiness is to some extent related to money.)
When Scholes asks Santos what he thinks of research, she replies, "They are important, but I don't think they change the idea of the lecture, which is that high wealth has little effect on happiness. The key is that it's much less than we anticipate, and it's much less effective than the other methods we offer."
Practices such as meditation, gratitude, and creating time for social connections have the greatest impact on our well-being, she says, adding that they are much easier to achieve than trying to break the $ 10 million mark.
Santos continues: "Money does not increase happiness the way we think. Our minds lie to us about the impact that extra money will have on our happiness.
Be more careful about how you spend your money
Later in the lecture, Santos interviewed Elizabeth Dunn, a researcher on happiness and co-author of the book Happy Money. They discuss why spending money on experiences, not things, makes us happy.
But don't things create emotions? And don't you need money to buy these things?
"Driving on a picturesque highway makes me happy, so I spent thousands of kilometers in the car. The trip makes me happy, so I spent thousands of dollars on tickets - not to mention a hotel, food and excursions," said Scholes.
Santos's answer to this question is: "It depends on the circumstances. If you can be careful about how the new car feels when you drive it, given the music, how well it moves, etc., the new car can feel like an experience.”
Well, it makes a little more sense: it's more of a compromise. Money can make us happy if we focus on buying things that generate the same positive experience over and over again.
New and often short experiences, such as the expensive garment you will not wear every day, are less susceptible to hedonistic adaptation. The goal is to keep the happiness of fading.
New goal: to change your way of life and your way of thinking
Santos concludes the lecture as follows: "So does money really make us happier? Maybe to some extent. Maybe if you're in the United States and you only make $ 10,000 a year, then yes, more money will make you happier.” For others, however, more money won't matter.
"Overall, her lectures have changed the way I think about money, especially how I spend it and how much I give it priority. I am also working to change my lifestyle and thinking. Although there is no panacea for happiness, what helps the most is that I take action where I personally miss it,” says Scholes.
Santos advises experimenting with different practices to see what works better. A few months after completing the course, Scholes says what he has discovered so far and that these practices and changes in thinking are surprisingly life-changing:
"Am I completely convinced that money will not make me happy? Absolutely. It will take a lot of effort on my part, but I'm working on it - and it's a pretty significant leap compared to my old self," says Scholes.
