Will More Money Make You Happy?

Conventional wisdom says that “money doesn’t buy happiness,” but researchers are arguing otherwise. Research over the last decade shows a direct correlation between happiness and income up to an annual salary of $75k, or close to $90k today adjusted for inflation.

It makes complete sense when you seriously think about it: Not having enough money to cover necessary living expenses can be incredibly stressful and challenging, putting a strain on your overall happiness. It is tough to be happy when you are unsure of where your next meal is coming from or wondering how you’ll pay the utility bills this month. But, as your income increases, many of those money-related stressors begin to fade away, leaving room for increased happiness and satisfaction.

That said, once you’ve covered the basics, including some additional money for the extra “wants” or luxuries in life, happiness peaks and begins to plateau as income increases. Unfortunately, rather than enjoying their happiness, many begin to wonder why they aren’t “more” happy and assume they may just need to make a “little” bit more before being satisfied.

Maybe $120k will do it, they think, or $175k, or perhaps happiness lies around the $250k per year mark? But, unfortunately, this pursuit of “more” is often a byproduct of a more significant issue, a money script referred to as “money worship.”

What Is a Money Script?

Money scripts are the beliefs you hold unconsciously about money. In a way, it’s the stories you tell yourself about money without realizing it.

Financial psychologists Ted and Brad Klontz initially coined the term “money script” in 2011 during a now-famous study about money beliefs and behaviors that debuted in the Journal of Financial Therapy.

They identified four core money scripts, each with its own set of unique traits and outcomes.

1. Money avoidance: you try not to think about money.

2. Money worship: you believe that more money will lead to greater happiness.

3. Money status: you equate your net worth with your self-worth.

4. Money vigilance: you are alert, watchful, and concerned about your financial health.

These scripts can help you understand why you behave the way you do with money and offer some additional guidance on how to improve your relationship with money.

Do You Have a Money Worship Script?

You might have a money worship script if you think that:

• Life would be better if you had more money

• You would be happier if you had more money

• All your problems would go away with more money

If this sounds a lot like you, do not worry, you are not alone.

On the subject of money worship, Rick Kahler, a nationally-known speaker and pioneer in financial therapy writes:

“Money worship develops in part from living in a society that supports the worship of money. We are surrounded by messages that more money equals success. It often appears that people with wealth are more valued and respected than people without it. It can be difficult to challenge these values, especially if money worship beliefs are strongly held by our families, among our friends, and throughout our career fields.”

Money worship is a very commonly held belief system, making it even more difficult to challenge. That said, Brad Klontz offers some critical tips for those that have a money worship script:

1. Create a detailed and intentional giving plan and keep in mind that giving can include time and skills, in addition to money.

2. Put time between your impulse to purchase something and actually buying it. This can help you avoid buyer’s remorse by looking at your needs before purchasing.

3. Focus your time and energy on doing things you enjoy with the people you love. Use money as a tool to provide social connection rather than accumulate more possessions.

What Brings Happiness?

Once your money happiness has peaked, it may be time to pursue other avenues to achieve satisfaction. In his book, The Geometry of Wealth: How to shape a life of money and meaning, author Brian Portnoy offers a simple framework for happiness. He identifies four areas of life that you can focus on to improve your satisfaction and happiness levels. He calls them the four C’s:

Connection

Humans are social creatures. We yearn to connect and deepen our relationships with others, and strong social connection has been shown to significantly predict overall happiness levels.

Control

Control means having the ability to chart your course and define who you are and what you stand for. While we know there are things outside of our control, taking accountability for our decisions and path can contribute to a happier, more satisfying life.

Competence

Competence is all about being good at something you value, whatever that may be. Many people find this through their work or career, but competence can be found through other avenues such as volunteer work or hobbies for retirees.

Context

Context means being part of something bigger than ourselves. For many, this can come in the form of organized religion, local community, or specific groups they’re part of. Whatever the case may be, finding a group or broader purpose can help us feel part of something greater, leading to higher levels of happiness and satisfaction.

TrueNorth Wealth Is Here to Help

If you’re interested in speaking with a fiduciary CFP® professional that can help you navigate money scripts and money decisions, then TrueNorth Wealth is here to help with comprehensive wealth management services in Idaho and Utah.

TrueNorth Wealth is among the top Wealth Management firms in Utah and Idaho, with offices in Salt Lake City, Logan, St. George, and Boise. At TrueNorth Wealth, our team focuses on assisting our clients in building long-term wealth while also amplifying the enjoyment they receive from their money. We do this by pairing our clients with a dedicated CFP® professional backed by an incredible team.

For our team at TrueNorth, it’s about so much more than dollars and cents. It’s about serving communities all across Utah and Idaho with investment planning to help them achieve financial freedom and long-term flexibility. To learn more or schedule a no-cost consultation, visit our website at TrueNorth Wealth or call (801) 316-1875.