Can Money Make You Happy?
We spoke to Money Coach Dennis Harhalakis, about the emotional side of money, including its complex relationship with happiness and self-worth.
Do you think there’s a link between money & happiness?
Money can reduce unhappiness, but it won’t bring you happiness. As with this analogy, when I have a headache and take a painkiller, it gets rid of my headache, but it doesn’t make me happy. It only reduces my unhappiness.
Happiness research breaks happiness down into two parts: the experience of positive emotions – being ‘happy in your life’; and a sense that life is good, that you are progressing towards your goals, and that you are experiencing meaning and satisfaction. This is referred to as being ‘happy with your life’. We mostly focus on the first part – creating happy moments and we spend a lot of time and energy trying to be ‘happy in our lives’. Everything around us tells us if we buy this, or wear this, or drive that, it will make us happy. But that only produces a temporary happy moment, which, always fades. Happy with your life is more about being comfortable with who you are, where you are, and where you are going. In effect, you need both. It’s not just about what you earn, but whether that is enabling you to build wellbeing and long-term security for yourself. And whether you are using your time, energy and resources for things that are aligned with your core values.
Research around this is categorically clear. It shows that once you have the means to meet your basic needs – put food on the table, buy clothes, have a holiday – then, increasing your amount of money won’t of itself generate more happiness. Being happy in life is much more of an internal thing than an external thing.
Why does money evoke such an emotional response?
All our behaviours around money have a strong emotional element. That’s why developing positive financial changes starts with understanding these patterns.
Engaging with finances
Dealing with our finances is basically battling with 200 million years of evolution, which is telling me that the lion in front of me right now, is the one I need to worry about. Next week’s lion, next month’s, or that lion in 40 years…they are not on my horizon, I’m not wired up to concern myself with them. We live in an immediate reward world. Wherever possible, we push discomfort into the future. So, when is the best time to start that diet? Go to the gym? Sort out my finances? Logically it’s now; emotionally it’s anytime but now!
Most of us have never been shown how to manage money. This creates a problem, because when we don’t understand how to do something, but have to deal with it every day, we tend to internalise our struggle (whether that’s being in debt or not having enough savings etc.) and we assume there is something wrong with us. Then we get trapped in feelings of shame, guilt, and anxiety.
But not managing your finances is totally understandable. It’s not your fault, because no one ever showed you how. It’s tricky. What you can do is start with self-compassion and forgiveness. Find someone who can help you with it, and just engage with that process.
Spending is an emotional decision. We are looking for ways to make ourselves feel better. The trouble is that we’re told that it’s never what we already own, but the next shiny new thing that will make us happy. So, we need to practise social indifference, which is the ability not to be influenced by all these endless messages from the media, or by other people’s spending behaviours and material possessions. I’m not saying don’t buy nice things – enjoy what life has to offer, but without becoming addicted to it.
One of the best ways to control our spending is the H.A.L.T. method. Ask yourself: Am I Hungry? Angry/anxious? Lonely? Tired? These emotions cloud our judgement or weaken our willpower, preventing us from making sound decisions. So, to curb impulse purchases that you don’t really need or can’t afford, get into the habit of H.A.L.T.ing before spending: stop and check for any of those feelings that may be influencing your behaviour.
Photo: Spending money – Pexels
Why do we attribute self-worth to earnings & what should we do about it?
The trouble with money, apart from the fact that we have never been taught about it, is that it is very tied up with our feelings of self-worth… and that can trigger emotions of anxiety, shame, guilt, even jealousy or anger.
At the core of all of this is your relationship with money. If you define yourself by how much you earn, or the size of your house or the number of cars you own, or any of these external factors, and if you constantly compare yourself to others, you will struggle to find satisfaction and happiness. Net worth is not self-worth. It’s important to separate your net worth from your self-worth.
It comes back to how do I feel about myself? When you start work, you have completed the long haul of studying and passing exams, so that you can get the job and the salary. Part of the way to look at this, is to understand that learning is not a process that stops when you get into a job. You’ll continue to learn about your work and about yourself, you will develop new skills and further your knowledge – learning continues throughout life. And self-worth is attached to getting better at things. You should sit back and say, ‘well done me, I got through the educational process and got into the workplace.’
About Dennis Harhalakis
Dennis is the Founder of Cambridge Money Coaching. He shows people how to transform the way they think about money to reduce anxiety and other negative emotions, helping them to make better financial decisions and communicate in healthy ways.
For more information about Dennis Harhalakis & money coaching:
Find out more:
Grad Bites: Money and Me – Understanding our Relationship with Money
Why many of us feel anxious about financial matters & how we can build a healthier relationship with money
How to Develop Positive Financial Behaviours
Learn about financial behaviours that can help you stay in control of your money & build wealth & financial security
Grad Bites: Dealing with Debt
What is ‘good debt’ & ‘bad debt’? Key pointers on managing money & avoiding getting trapped in poor financial decisions