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Does Money Make Us Happy?

by Derek Sisterhen on September 6, 2011

Danny Kofke answered this question – “Does money make me happy?” – a long time ago. He and his family have accomplished more in the way of strong relationships and meaningful adventures on a salary most people would call meager. He appeared on Past Due Radio back in the good ol’ days when we broadcasted on AM 1030 in Raleigh. It’s great to have him back with us! ~D.S.

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We live in one of the wealthiest nations on Earth, yet so many people are unhappy. A lot of us seek professional help for this very reason. Clearly, having money can take away many worries, but it doesn’t automatically guarantee happiness.

Think about some of your peers. Do any of them make a lot of money but have nothing to show for it? There might be some who press the snooze button numerous times on Monday morning because they dread going to work. Even if you make $500,000 a year, if you are unhappy Monday through Friday you are not “wealthy.” Many people in this situation spend money and buy things to make themselves “happy.” Once the weekend rolls around, they can come up with some great reasons to buy things. “I work so hard and put up with so much I deserve ________________.” Fill in this blank with clothes, jewelry, eating out, and so on. I’ll make them happy, won’t it?

Let’s face it, buying things can bring about a sense of joy, but only for a moment. If I go out and buy a shirt it feels great. The first few times I wear it, it feels good. Then, after five or six times of wearing this shirt, something happens; it becomes old. How many of us have looked in our closet and said, “I have nothing to wear” even though we have 50 outfits staring back at us? At one point in time we liked these clothes (or at least we liked them enough to buy them) but, after a while, that feeling faded away. If our happiness is based on material things, we enter a vicious cycle of having to routinely make purchases to replace the dwindling happiness we once experienced from the previous purchase. Sounds a little expensive.

Emotions account for the largest component of any money problem. We know not to buy things we cannot afford using credit cards, but we still do. Let’s say we use a credit card with a 24% annual percentage rate (APR) and spend $1,000 on “happiness purchases”. If we didn’t make a single payment during the course of the year, we’d owe $1,240 after 12 months. An 8th grader can do the math, but we choose to look the other away. We’re too busy being happy with our new stuff.

The vicious cycle of happiness spending tends to drag other areas of our life into the whirlpool. Money and weight problems often go hand-in-hand. Just like the calculating simple interest, we now have easy access to basically all of the nutritional information for the food we eat. Yet nearly two-thirds of our country is classified overweight or obese. We know how bad it is to continually stop by our favorite fast-food restaurant to order a number 3 and super-size it, but we still do it. Why do we do this to ourselves? The answer is the same as why we buy things we can’t afford: the temporary feeling of satisfaction.

It’s pretty simple to have money and be healthy on paper. In practice, though, the results will show our true level of commitment. Imagine if you lived by the phrase “Eat Less Than You Burn, Spend Less Than You Earn”. Live healthy, live happy.

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Danny Kofke is currently a special education teacher in Georgia. His love of teaching and finances led him to write two books – How To Survive (and perhaps thrive) On A Teacher’s Salary and the just released A Simple Book of Financial Wisdom: Teach Yourself (and Your Kids) How to Live Wealthy with Little Money. Danny has appeared on numerous television shows including Fox & Friends and CNN’s Newsroom, and has been interviewed on over 250 radio shows. Danny wants to show others that, if this 35 year-old school teacher can gain financial wisdom, then they can too. He is living proof that a family can live wealthy on little money. To learn more about Danny, please visit dannykofke.blogspot.com.

  • http://pastdueradio.com/ Derek Sisterhen

    It’s funny how some discussions about money never get old!  Even though countless studies have shown that money does not increase happiness, the behaviors of so many of us tend toward the idea that “for me it will be different”.

    Thanks for addressing this issue, Danny!

  • http://twitter.com/JWFinCoaching Jonathan White

    Danny, I think the problem with our society is that we ask ourselves how this purchase will make us feel today rather than how will this purchase impact me 5-10 years from now. When we view our finances in the short term, we make impulse purchase and “live in the moment.” But when we view our finances in the long run we make wiser decisions and spend our money on things that will impact us for years. Thanks for sharing your thoughts.

  • http://pastdueradio.com/ Derek Sisterhen

    Jonathan, one of my first jobs in high school was selling shoes at Florsheim in the local mall.  We had a big rack of shoe care products – like quick-shine sponges, shoe polish, and laces – right by our cash register.

    One time my good friend came in to visit with me and he saw the quick-shine sponge, thought it was amazing (though he may have only worn dress shoes 2-3 times per year), and bought one.  I actually recall trying to talk him out of it!

    I was 17 years old and witnessed the power of the impulse purchase firsthand.  All these years later, I’m willing to bet my friend would prefer to have his $8.99 back.

    Thanks for the comment!

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