Time or Money? Happy People Weigh in
If you were given the choice between a higher salary or a shorter work day, which one would you choose? Your choice between time or money partly depends on how happy you are. A study published by the journal Social Psychological and Personality Science revealed that happy people tend to choose more time over more money.
According to a study done by Princeton University, earning up to $75,000 per year and spending it well can influence your subjective level of happiness. But beyond that, can you be happier by making more money, or would it be better to have more time to enjoy with your loved ones and yourself? Let’s take a look.
Time or money: The relationship between money and happiness has a limit
Daniel Kahneman, psychologist and winner of the Nobel Memorial Prize in Economic Sciences in 2002, and Angus Deaton, winner of the same Nobel prize in 2015, analyzed more than 450,000 responses and found that there is a positive correlation between income and self-reported happiness.
However, the participants’ subjective rating of their daily emotional state flattened out after a certain level of income. In other words, there’s a point where earning more money won’t make you any happier. The relationship between money and happiness plateaus after a salary of $75,000.
All this is to say that money can buy happiness to a certain degree, but there is a limit. Once you surpass it, your level of satisfaction won’t increase based on money. In fact, it could even decrease.
“My dream is like Picasso’s: to have a lot of money, but to live quietly like the poor.”
Time or money: Can money buy happiness?
Various studies suggest that money doesn’t buy happiness, just short-lasting spikes of pleasure. This can be explained by the psychological concept of habituation. At first, making a lot of money is exciting, but over time the sensation starts to decrease. You get so used to it, and you go back to the level of happiness you were at before.
Overall happiness doesn’t just depend on what you do, but also how you interpret it. And how you define happiness to begin with.
On a related note, success is associated with having more of everything: more money, more stuff, more recognition. And it makes sense — we’ve already talked about how well-spent money can help move you towards happiness. But what about time? The stereotypical successful person is constantly working and barely has time to enjoy things like spending time with friends and family.
What good is success, money, or recognition if you can’t enjoy it? If the goal is to be happy, why not spend more time doing what really makes you feel alive? The answer might be that we don’t know how, or that we haven’t even really thought about it…
“He that is of the opinion money will do everything may well be suspected of doing everything for money.”
Time or money: Do you know how to use your time to be happy?
The study published in Social Psychological and Personality Science asked almost 4,500 people if they valued money more than time for happiness. 64% indicated that they preferred money.
Despite their self-reported preferences, the study also found that people who cared more about time turned out to be happier. When asked the same question a year later, 25% of the participants who had initially chosen money changed their minds. They chose time.
The results of the study showed that between two people in similar circumstances, the person who decided that time was more important than money would be happier than the one who chose money. And that’s not the only study of its kind.
A University of British Columbia study also found that valuing time over money is associated with higher levels of happiness. This is especially true when earning the money involves long work hours.
Time starts to become more of a priority as people get older. It makes sense, since every second that passes becomes that much more precious. Today, younger people seem to have taken note, specifically millennials, born between 1980 and 1995. According to a 2013 study from PricewaterhouseCoopers, millennials prefer more free time and work-life balance over a higher salary.
Millennials believe that work is a means to stability and wellness, but it’s not the only way.
The biggest takeaway of these studies is that money can help you be happy up to a certain point, but there is a limit. We need to know how to spend our time well, not just our money.