icon bookmark-bicon bookmarkicon cameraicon checkicon chevron downicon chevron lefticon chevron righticon chevron upicon closeicon v-compressicon downloadicon editicon v-expandicon fbicon fileicon filtericon flag ruicon full chevron downicon full chevron lefticon full chevron righticon full chevron upicon gpicon insicon mailicon moveicon-musicicon mutedicon nomutedicon okicon v-pauseicon v-playicon searchicon shareicon sign inicon sign upicon stepbackicon stepforicon swipe downicon tagicon tagsicon tgicon trashicon twicon vkicon yticon wticon fm

Key to happiness: ‘Keeping up with Joneses’ or seizing the moment?

Key to happiness: ‘Keeping up with Joneses’ or seizing the moment?
While it is generally recognized that wealth alone will not buy happiness, consumers still spend trillions of dollars per year in the pursuit of material happiness. New research, however, indicates they may be missing the boat.

Due to what is perceived as the lasting quality of material goods – consumer items that we pay for with cash and carry home in a shopping bag – many people are denying themselves the pleasure that comes from fleeting life experiences, according to Professor Ryan Howell, associate professor of psychology at San Francisco State University.

READ MORE: 'World's poorest president' gets $1mn offer for old VW Beetle

“What we find is that there’s this huge misforecast,” Howell told the premier US publication on wealth accumulation, the Wall Street Journal. “People think that experiences are only going to provide temporary happiness, but they actually provide both more happiness and more lasting value.”

Reuters/Eric Gaillard

Meanwhile, people are lured into the belief that material purchases deliver happiness, thereby placing themselves on a “hedonic treadmill.”

Sonja Lyubomirsky, psychology professor at the University of California, told the Wall Street Journal that people “are remarkably good at getting used to changes in their lives, especially positive changes.” She said when a person makes it to a higher pay bracket, they experience “a boost, but then your aspirations rise too.” This is where the phenomenon known as “keeping up with the Joneses” comes into play, where people suddenly judge themselves by what they have in relation to their neighbors.

“Maybe you buy a bigger home in a new neighborhood, and so your neighbors are richer, and you start wanting even more.” This is what Lyubomirsky describes as the moment a person sets foot on “the hedonic treadmill,” and trying to avoid falling into this pattern of behavior “is really a challenge.” In fact, it is this sort of competition between people on the purely material plane that is largely responsible for keeping the wheels of the global economy moving forward.

Lyubomirsky warns that when our material lives “become unchanging, that’s when you adapt to them.”

Cornell University psychology professor, Thomas Gilovich, reported similar findings.

Reuters/Sergei Karpukhin

“People often make a rational calculation: I have a limited amount of money, and I can either go there, or I can have this,” the Journal quoted Gilovich as saying. “If I go there, it’ll be great, but it’ll be done in no time. If I buy this thing, at least I’ll always have it. That is factually true, but not psychologically true. We adapt to our material goods.”

This “hedonic adaption” makes the happiness we get from our acquisitiveness eventually slip through our fingers, as every purchase – even a brand new sports car - sooner or later loses its shine, if not in the material sense, then in the psychological sense.

Meanwhile, experiences lead to less direct competition between people, since experiences, due to their very nature, are available to everybody at any moment.

“Keeping up with the Joneses is much more prominent for material things than for experiential things,” Gilovich said. “Imagine you’ve just bought a new computer that you really like, and I show up and say I’ve paid the same amount for one with a brighter monitor and faster processor. How much would that bug you?”

Gilovich and his colleagues demonstrated in a recent paper entitled “Waiting for Merlot” that when people wait for an event or experience, like a vacation, they are genuinely enthusiastic, whereas anticipating the arrival of material things “seemed to have an impatient quality.”

Spend on others – and clear that debt

Elizabeth Dunn, associate professor of psychology at the University of British Columbia conducted an experiment where she gave some students money “to spend on themselves and others to spend it on someone else.”

The results were rather surprising: Dunn found that the group who spent money on other people reported a higher level of happiness than those who indulged themselves on purchases.

Professor Dunn has conducted the same experiment around the world with results that show a remarkable degree of consistency.

Reuters/Sergei Karpukhin

“The fact that we were able to observe the same effect that we’d seen in Canada in places like South Africa and Uganda was probably the biggest surprise of my career,” she told the Journal. “A lot of us think we’ll give to charity one day, when we’re richer, but actually we see the benefits of giving even among people who are struggling to meet their own basic needs.”

But this does not mean a person should not buy anything. On the contrary, Dunn has discovered that the key to happiness is to spend, but spend wisely.

READ MORE: 90% of Americans are poorer today than in 1987

“Use money to buy yourself better time,” she advised. “Don’t buy a slightly fancier car so that you have heated seats during your two-hour commute. Buy a place close to work, so that you can use that final hour of daylight to kick a ball around in the park with your kids.”

Dunn then emphasized the importance of getting rid of any accumulated debt, which is a major source of anxiety and unhappiness for many people.

“Savings are good for happiness; debt is bad for happiness. But debt is more potently bad than savings are good,” she says. “From a happiness perspective, it’s more important to get rid of debt than to build savings.”