Money or People: What Will You Choose?

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Since the 1980s, student loan debt has increased, and Millennials became the poorest generation with the most student loan debt1. Moreover, student loan debt is severely impacting personal and professional lives, especially for people with lower socioeconomic status2. Being in debt is linked to mental disorders, depression, suicide, and substance abuse, such as problem drinking and drug dependence3. Yes, it is true that, particularly for hourly-waged workers, an increase in income leads to an increase in happiness and well-being5, but if you’re frustrated while earning more income, you’re more likely to be divorced, have less education, and have less income than people who have an increase in life satisfaction during the financial boon6.

The good news is that connectedness helps during a financial crisis; it helps maintain well-being during financial hardship to aid the transition into financial comfort4. Here are few tips to help you maintain a positive mindset with money:

1. Put People First, Not Money: People with at least 8 million dollars are only moderately happier than people with lower amounts of money7. However, spending money on others does make people happier, especially if the spending is on basic human needs8,9. Also, paying for experiences hurts less than paying for material items10. Check out my entry on connectedness for nonfinancial ways to connect with people.
2. Focus on Time Not Money: Separate the concept that you have to work so many hours to make a certain amount of money. Thinking that time is money will lead to impatience and less enjoyment11. Happier people focus on increasing their time, have just the right number of things to do, and spend their time wisely12. Given the choice between money and time, choosing money is common, but choosing time is connected to greater happiness13. In fact, earning more money doesn’t necessarily lead to greater well-being: well-being might peak at a median salary, but will plateau at upper-quartile salaries14, and being exposed to wealth leads to not enjoying small pleasures (like chocolate)15. However, using money to buy time will help protect your life satisfaction during time crunches16, and prioritizing time over money leads to believing your well-being is higher17.
3. Increase Income, But Keep Control: It is true that having a good financial situation maintains a high life satisfaction18, especially for those with liquid wealth19. Having more resources will help buffer a financial crisis and maintain happiness20, but two different people will experience the same salary differently. For example, with an increase in income, one person might increase spending, which will maintain a poor financial situation. So, maintaining control will help increase life satisfaction21. Thinking you have control over your situation will bring about life satisfaction19.
4. Gratitude: Also, check out my post on gratitude. It will explain how feeling grateful will help you feel less indebted.

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An important take-away concept from this message is that although improving your financial situation will improve your life, it’s not the entire story. Focusing on time and your connections with others will also improve your life. Going after a better life solely through money will lead to lower well-being22.

1. Kurz, Li & Vine (2018); 2. Wilcox, Barbaro-Kukade, Pietrantonio, Franks, & Davis (2019); 3. Richardson, Elliott, & Roberts (2013), 4. Richards (2016) 5. DeVoe & Pfeffer (2009); 6. Becchetti, Corrado, & Rossetti (2011); 7. Donnelly, Zheng, Haisley, & Norton (2018); 8. Atkin, Dunn, & Norton (2012); 9. Dunn, Aknin, & Norton (2014); 10. Mann & Gilovich (2016); 11. Connors, Khamitov, Moroz, Campbell, & Henderson (2016), 12. Mogliner (2019); 13. Hershfield, Mogilner, & Barnea (2016); 14. Sengupta et al. (2012); 15. Quoidbach, Dunn, Petrides, & Mikolajczak (2010); 16. Whillans, Dunn, Smeets, Bekkers, & Norton (2017); 17. Whillans, Weidman, & Dunn (2016); 18. Zhang, Tian, & Grigoriou (2011); 19. Ruberton, Gladstone, & Lyubomirsky (2016); 20. Diener & Diener (1996) 21. Johnson & Kreuger (2006); 22. Garđarsdóttir, Dittmar, & Aspinall (2009); Extra Resource: Diener (1984)