MY MONEY

Making life all about money can leave you miserable, study finds

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Many people believe financial success breeds happiness. But while financial success can eliminate some of the stresses associated with unhappiness, the unchecked pursuit of financial success may have the exact opposite effect.

A study published by the University at Buffalo and Harvard Business School involving 2500 participants looked for relationships between financial contingency of self-worth and key variables such as time spent with others, loneliness and social disconnection.

It found that basing your self-worth on financial success can lead to feelings of pressure and a lack of autonomy.

does money make you happy

"Feeling that pressure to achieve financial goals means we're putting ourselves to work at the cost of spending time with loved ones, and it's that lack of time spent with people close to us that's associated with feeling lonely and disconnected," says Deborah Ward from the University of Buffalo.

By contrast, strong social networks and personal relationships promote good mental health. The pursuit of financial success should work alongside, rather than substitute, personal and social connections.

Understanding these connections may be even more important during the current pandemic. Indeed, physical social distancing does not mean social isolation. The two can operate in tandem.

"Depression and anxiety are tied to isolation, and we're certainly seeing this now with the difficulties we have connecting with friends during the COVID-19 pandemic," says Ward.

"We need social connections as humans in order to feel secure, to feel mentally healthy and happy. But much of what's required to achieve success in the financial domain comes at the expense of spending time with family and friends."

Ward says it's not financial success that's problematic or the desire for money that's problematic. Rather, it stems from directly linking your financial success to who you are as a person, a concept psychologists refer to as 'financial contingency of self-worth'.

"We saw consistent associations between valuing money in terms of who you are and experiencing negative social outcomes in previous work, so this led us to ask the question of why these associations are present," says Ward.

"We see these findings as further evidence that people who base their self-worth on money are likely to feel pressured to achieve financial success, which is tied to the quality of their relationships with others."

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David Thornton is a journalist at Money magazine. He previously worked at Your Money, covering market news as producer of Trading Day Live. Before that, he covered business and finance news at The Constant Investor. David holds a Masters of International Relations from the University of Melbourne.
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