Can money buy happiness? Today’s culture leads you to believe so. In Ed Diener’s book Happiness, he writes about the complex factors that contribute to true happiness. He acknowledges that money, and the comfort it brings, is one of those factors. So, yes — money can bring you joy to some extent, as long as it is considered nothing more than what it is: a piece of the entire puzzle. Those who seek the solution through money alone will often end up miserable.
Christopher Peterson, Ph.D., author of Pursuing the Good Life: 100 Reflections on Positive Psychology, supports the notion that money has a significant influence on personal happiness. Through multiple worldwide studies, Peterson witnessed a paradox — spending in excess to one’s comfort directly correlates to a general reduction in feelings of happiness and contentment. Peterson believes that the culprit to these recent psychological issues stems from a “moral decay” brought on by “rampant materialization” worldwide.
As a result of our modern, consumption-driven culture, society has become fixated on the wrong aspects of wealth. The habit of excessive spending can create a mirage of fulfillment. Over time, however, this mirage will undoubtedly subside, leaving an emotional void it once filled. There is a gentle balance between spending for necessity and spending for comfort or luxury.
Personally, I believe that financial well-being and happiness can be achieved through a few basic techniques, such as developing a personal-spending range, adhering to a financial plan, and implementing an investment strategy that targets your future goals. Once these actions are implemented and you feel your future is secure, there is nothing wrong with indulging in personal luxuries, but also consider your ability to help others less fortunate, for that is a luxury of its own.
We have found at our practice that the end often starts with the beginning: The more confident you are with your goals and the rigor in which you strive to achieve them, the more content you likely will be. We also have experienced that families or individuals who find joy in helping others are coincidentally less stressed about overall finances — in other words, we believe that moderate spending and charitable consciousness are the secret to overall happiness.
Lars Knudsen is a managing director, partner at HighTower Bellevue. He founded Triad Wealth Stewardship, now known as HighTower Bellevue, to deliver a personalized, custom approach to financial planning and family wealth stewardship to clients. He leads the team with more than 30 years of experience.