Untangling The Links Between Money, Self-Esteem, and Happiness

The relationship between our thoughts and our personal income

The way we think about ourselves actually has an influence on our personal income. Those who have confidence and high self-esteem tend to behave in ways that allow for them to successfully take advantage of opportunities to make more money. On the other hand, those with low self-esteem and negative thinking patterns tend to sabotage their own chances of financial success. Those who believe they are not worthy or capable will look towards their past failures to justify their negative self-image, thereby hindering their financial growth. Those with a positive attitude and a high sense of self-worth will look towards their past achievements to know that they can succeed in new financial endeavors.

More money mean more happiness?

You may have heard “money does not buy happiness” and according to most research, that is true.  If you earn an income that allows you to comfortably pay your bills every month (e.g. $50,000 a year), then the link between money and happiness is weaker than compared to an income below that amount. Those who are struggling to get by financially experience a lot of stress, but once they have achieved a level of financial stability and comfort, their happiness level is no longer affected by money as it once was before. Although they are happier due to the lack of financial stress, it does not means that more material purchases will be the key to long-term happiness. Studies have found that the happiness level of someone making $100,000 a year is not much different that someone with a million-dollar income.

More money does not bring more happiness

Researchers have found that money spent on fun experiences (like a vacation or concert) is linked with more happiness, whereas material purchases with no sense of anticipation, do not have the same effect. The anticipation of an experience or purchase of a material good seems to be much more satisfying, no matter what your income is. However, the happiness that results from these purchases is fleeting. We tend to think that if we have more money, we can benefit from the short-term happiness by making these purchases on a regular basis. What many don’t realize is that we lose the sense of appreciation and positive emotions attached to those materials or experiences when it is so easily attained.

What affects happiness more than money?

Self-esteem and relationships with others are some of the biggest factors that determine happiness. With a little bit of effort and the right attitude, you can make improvements in your own happiness.

Click here to browse financial and self-esteem resources in the Urban Balance Directory.

Hale, J. (2013). What Makes Us Happy?. Psych Central. Retrieved on June 22, 2015, from http://psychcentral.com/lib/what-makes-us-happy/

Marter, J. (2013). Change Your Thinking to Have More Money. Psych Central. Retrieved on June 22, 2015, from http://blogs.psychcentral.com/success/2013/06/change-your-thinking-to-have-more-money/

Nauert PhD, R. (2015). Does Money = Happiness ?. Psych Central. Retrieved on June 22, 2015, from http://psychcentral.com/news/2015/03/02/does-money-happiness/81836.html

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