Why Money Makes You Miserable & What to Do about It
Updated: Jun 12, 2020
You have probably heard the phrase, “Money can’t buy happiness.” To which I would add, “but everyone wants to find out for themselves.” One of the most commonly held beliefs is that more money will make you happy.
Making more money will not make you happier. The only way to feel good about yourself and your financial situation is to stop comparing yourself to other people. The key to financial happiness is to focus on your goals and not worry about how much money other people have.
Let’s review why money makes us frustrated and miserable and what we can do about it.
Success is relative
As pointed out in an article in the Atlantic, how we feel about our financial situation has less to do with whether or not we’ve achieved the goals we set out for ourselves and more to do with our success compared to the people around us.
If your goal was to make $100,000 per year by the time you were 35 and you achieve that goal, there is a good chance that you won’t feel accomplished if you find out your best friend is making $250,000 per year
Opher Ganel, a contributing writer for Making of a Millionaire, wrote about this subject, citing research that found that “on average, people who make more money are happier, but that happiness stops increasing once you reach a certain income.”
Once people have their basic needs covered and are living a “comfortable” life, what appears to make someone feel more happy and more content with their finances is if they are richer than the people they compare themselves to.
One study found that people’s happiness had as much to do with how much money other people make as it did with how much money they make. This is referred to as “Social comparison.”
The sad truth is most people want to feel superior to the people around them. Very few people would publicly admit to having money problems. Most people do the exact opposite. They use social media, particularly Instagram and Facebook, to make themselves look wealthier and more successful than they are. Meanwhile, in reality, most people’s finances are a mess, and it is doing damage to their mental health.
By any objective measure, someone making $200,000 per year should have enough money to cover all of their needs and most of their wants. A report from 2018 found that 41% of Americans earning more than $200,000 per year have cried because they did not have enough money. Social media has made it easier than ever for us to compare our situation to other people and, in the process, make ourselves feel worse about our finances. The saddest part is that we often end up comparing ourselves to something that isn’t even real.
Develop a happier healthier relationship with money in two easy steps
If you want to have a more positive outlook on money you need to do two things.
Figure out what makes you happy and align your finances accordingly.
Talk about money with your friends and family.
Aligning happiness and money
Spend money on things that provide value to your life and stop spending money on things that don’t. I recently wrote about three questions to ask yourself before you spend money.
Did I receive fulfillment, satisfaction, and value in proportion to the energy spent?
Is this expenditure of life energy in alignment with my values and life purpose?
How might this expenditure change if I didn’t have to work for a living? If you spent 100% of your money on things that provided you the fulfillment, your money and happiness would be completely aligned. While none of us will ever wholly align our money and happiness, we can take steps towards that goal.
I spend money on travel because it provides me with fulfillment and makes me feel like I’m living a life worth living. I spend very little money on eating out because I view food in a utilitarian way. I eat for energy, so spending a lot of money at a restaurant provides me no fulfillment.
You might feel the opposite, maybe you hate traveling, but you are a total foodie. Then spending money out at fancy and unique restaurants make much more sense for you than it does for me. The more we spend on things that provide us fulfillment, the more likely we are to feel successful and happy.
Here is what you should never do under any circumstance; spend money on things with the intention to impress other people. Buying these things isn’t likely to win their approval. Even if it does, the approval of other people won’t make you happy.
The things people spend money on to appear successful are, by design, very expensive.
Money is a zero-sum game. The more you spend to impress others, the less money you have left to spend on the things that provide you fulfillment. Spending to impress is a surefire way to live a miserable life.
In section 2 of the 30-Day Blueprint, I walk you through step by step how to spend less money on "Stuff" and more money on the things you value.
Talking about money
A paper from Harvard Medical School found that showing gratitude and giving thanks can make you happier. Comparing your financial situation to other people has a crowding-out effect on your ability to give thanks for what you have right now.
It’s hard to be grateful that you have food on the table if all you can think about is your neighbor who eats a gourmet dinner every night.
If you want to develop a better relationship with money, start by expressing gratitude for the things you already have.
If you are in an incredibly challenging financial situation, it might be difficult to put yourself in the mental space to take stock of all the great things in your life. That does not mean you can’t still express gratitude.
No matter how difficult your circumstances are right now, it’s essential to recognize that where you are today is not where you will be in a year from now or five years from now.
The very act of acknowledging that things can get better is another way to express your gratitude.
Money can’t make you happy; only you can do that
Having more money does not guarantee you will be a happier person. This is especially true if you compare yourself to other people. There will always be people you know who have more and make more money than you do. Doubling your income won’t make you happy if you keep comparing yourself to other people.
Instead, focus on your own financial goals. Figure out a way to spend more of your money on the things that make you happiest in life.
Never spend money to impress other people. You might as well flush your money down the toilet.
If your current financial situation is stressing you out, don’t be afraid to talk about it with friends and family. Talking about problems with people who care about us and want to help us is a significant first step to solving those problems.
Even if you are in a tough financial situation, try and express financial gratitude. Being grateful for the things you have rather than the things you don’t is an important first step to a better relationship with money.
Want to learn how to better manage your money and reduce financial stress? Enroll in Millionaire in the Making: The 30-Day Blueprint.
This article is for informational purposes only, it should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions