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What the world’s longest happiness study says about money

[February 07, 2023] By Chris Taylor

NEW YORK (Reuters) - For generations, society has grappled with the question of whether money brings happiness. Now a new book has some answers - with the data to back it up.

The easy answer, according to Robert Waldinger and Marc Schulz, authors of "The Good Life": No, money will not buy you happiness. That's according to the findings of the Harvard Study of Adult Development, the world's longest study on happiness.

The more complex answer is money is obviously a big part of our everyday lives, and up to a certain income level ($75,000 in well-known study) will indeed affect our satisfaction, in terms of meeting basic needs and providing for our families

Beyond that, though, there is no correlation. For most financial experts, the point is to not treat money as the ultimate goal, but as a means to an end, to shape a meaningful existence.

Since 1938, the Harvard Study of Adult Development has tracked people – now up to three generations – to find out what really makes for a satisfying life and what does not.

“Money can’t buy us happiness, but it’s a tool that can give us security and safety and a sense of control over lives,” says Schulz, who is also a psychology professor at Pennsylvania’s Bryn Mawr College. “At the end of the day, life is really about our connections with others. It’s our relationships that keep us happy.”

Here is what the world’s longest study on happiness can teach us about our lives, our careers and, yes, our money:

CAREER SUCCESS DOES NOT EQUAL HAPPINESS

Our tendency as a society is to imagine that being a big achiever will solve all our problems.

Not so.

In the Harvard study, the sample of participants with “more prestigious jobs and more money were no happier in their lives,” Schulz says.

The notion that you will be satisfied if you chase a money-oriented achievement – like a big promotion or a dollar figure in your 401(k) – pushes happiness into the future and always out of reach.

Says Schulz: “The problem with that approach is that life passes you by.”

TREASURE WORK FRIENDSHIPS

Yes, a main purpose of going into the office is for the paycheck. But do not discount all the little daily interactions with the people around you in the office, because it turns out they are very important indeed.

“A large part of our waking lives is spent at work, and if you believe that relationships make for a good life, then you need to think about your connections at work,” Schulz says. “Those relationships are important to your well-being, because you spend such a large amount of time with them.”

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Woman holds U.S. dollar banknotes in this illustration taken May 30, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

PREPARE FOR POST-RETIREMENT LIFE NOW

Retirement represents a significant risk to many people’s happiness and sense of self-worth: Since so many people are so identified with their careers and job titles, retirement can take all that away and make them feel totally lost.

That is why mid-career professionals should think about that gear-shifting now. Build a life framework with purpose and meaning and networks outside of the office. That could mean taking up new activities, or repairing old friendships, or volunteering for favorite causes.

“People who have done best in retirement are those who lean into it, and think about their social connections, and rebuild their networks outside of work,” Schulz adds.

VALUE EXPERIENCES OVER THINGS

Accumulating more stuff is not going to nudge the happiness meter, according to the study’s findings. Instead, think in terms of experiences.

“Rather than buying a bigger house or a nicer car, if you use your money to share experiences with others, that money will get you a better return on happiness,” Schulz says.

That might be a vacation, or treating your family to a nice dinner.

"Those are the kinds of activities that allow us to connect,” he adds.

DO A MINI-HARVARD STUDY – ON YOURSELF

How the Harvard Study operates is by checking in with respondents – 724 original participants, some of whom are still around, and 1,300 descendants – for occasional reflection and self-evaluation.

Are they happy? Are they where they want to be? Are there areas where they are falling short?

There is no reason why the rest of us cannot do the same, with periodic check-ins. That way, if your career and friendships and finances are not working together to give you a life of purpose and meaning, you can adjust course.

“It’s absolutely critical,” Schulz says. “There are gains to be made by doing some self-examination, and figuring out whether you are doing what’s really important to you.”

(Editing by Lauren Young and Aurora Ellis; Follow us @ReutersMoney)

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