THAT FINANCIAL SWEET SPOT

EVERYONE KNOWS MONEY DOESN’T BUY HAPPINESS. THEN WHY ARE WE ALWAYS TRYING TO GET MORE OF IT?

“If I only had a little more money, I’d be happier.”

When was the last time that you had this thought? Every day, we make choices based on the idea that joy can be bought and that more money makes everything better. We take the new job with the extra hour in traffic because it pays more. We put a coat on credit because it’s designer. We buy the big house because it has a yard for our future kids and a kitchen island that’s “an entertainer’s dream.”

To be fair, scientifically speaking, when we see something we want, a new pair of shoes or a gadget, we do feel joy; it triggers a patch of tissue in the brain, the nucleus accumbens, the so-called sex and money area. It gets activated when humans receive a reward, whether drugs, money or food. Then when we buy something, we get a delicious burst of dopamine in the brain.

That sounds sexy and yummy and all, but the euphoria doesn’t last. Then we just need more stuff. All that crap we buy loses its lustre. When the novelty wears off and the shopping high from the endorphin and dopamine dump dissipates, we’re left with a void and possibly regret.

“Why did I spend money on this?!?” we ask. Because I need it. Because I deserve it. Because I had a rough day. Because I have no willpower. Because it was on sale. Because it’s a habit. Because it was a whim, a knee-jerk reaction. But when you get down to it? Because I want to be happy.

So, what do we actually need to be happy? Let’s break down our thoughts on the subject and rebuild. This is me swinging on a wrecking ball (fully clothed) to help.

THE MAGIC NUMBER

We all need a certain amount of money to be happy. But how much?

For those of us who are on the verge of losing our homes, who fret about feeding our children, who cringe when the phone rings because debt collectors may be calling, without question, more money will make us happier. But for the rest of us, before connecting cash with joy, we need to talk about what we mean by “happy.”

Scientists in neuroeconomics (the study of how we make economic decisions) break happiness into two types:

• Life satisfaction: an evaluation of your well-being as a whole (the kind of happy where you’re pleased with life in general);

• Day-to-day mood: the highs and lows; the joy, stress, sadness, anger and affection that you experience from one moment to the next — how you feel today, how you felt yesterday. (The kind of happy that most of us relate to — the right now happiness.)

With life satisfaction, the richer people got, the more satisfied they were with their lives. In worldwide studies, people in richer countries reported higher life satisfaction than those in poorer countries. (We should also consider that wealthier countries are more politically stable, more peaceful and less oppressive — which affects wellbeing.) But according to a 2018 Purdue University study, there was a limit: $95,000 U.S. (pre-tax, per single-family household). Above that, more money didn’t mean that you were more satisfied. With dayto-day happiness, the threshold is $60,000 to $75,000 per household, according to various studies. The 2018 study showed that after these salaries are met, life satisfaction and day-to-day happiness actually slightly decrease with more money.

WHAT THE WHAT?

Well, apparently, when all of our basic needs are met, we become driven by other desires such as chasing after more material stuff and comparing ourselves to others, which make us unhappy. Also, high incomes can come with high demands (more working hours, more stress and less time with family and for leisure).

This doesn’t mean that we should all go out and try to make exactly $75,000 a year — our socalled feel-good financial sweet spot. The studies are averages, and we all need different things to be happy. But all of us find joy in some simple things — kisses, laughter, getting ID’d over the age of 25.

Marketing professor Hal Hershfield once told me, “Even if I have an amazing car in my driveway, a huge house and a big fat income, that doesn’t necessarily mean that I’ll be happier on a dayby-day basis, because the types of things that influence happiness are who I interact with, how I spend my time and the things that I do.”

Think of some of your happiest times in the past week. Were you spending it with people? Were you taking time to enjoy an activity, going for a run or catching up with a good friend? Would a wad of cash have made those moments that much better?

Probably not. If you answered “yes” to the latter question, how much more do you need to be happy? Read on.

YOUR MAGIC NUMBER IS PROBABLY WRONG

Let’s do an exercise together. How happy are you on a scale of one to 10?

Now think about how much money you have in the bank, your salary. How much more money would you need to be a perfect 10?

Michael Norton, who teaches at Harvard Business School and co-authored Happy Money: The Science of Smarter Spending, surveyed average-income earners and high-net-worth Britons (with a net worth of more than $1 million), and he asked them those questions. “Everybody said two to three times as much money,” Norton told me.

“Why is that a problem?” I asked, estimating the same for myself.

“That’s a problem because people at $1 million said, ‘If I had $3 million, I’d be a perfect 10. Except that people who had $3 million said, ‘If I had $9 million, I’d be a perfect 10’.”

Basically, happiness is on a sliding scale. Think about how much this sucks. No matter what you have, you’ll always want more. Even if you have millions. When you find the gold at the end of the rainbow, the pot is just too damn small, and then you’re off again, chasing more rainbows.

It’s like a curse really. It also takes the fun out of my childhood dream of winning a million-dollar lottery. That was the very first fantasy I ever had: winning a jackpot and marrying one of the New Kids on the Block (anyone but Danny). I’d have fancy clothes and we’d eat at Red Lobster every weekend. (Still my idea of a hot date today.)

But despite what we may think, winning the lottery doesn’t buy you a one-way ticket to Euphoria Town. Take this famous study from 1978 where researchers asked two very different groups about their happiness: recent Illinois State Lottery winners who scored $50,000 to $1 million and recent victims of catastrophic accidents who were now paraplegic or quadriplegic. They asked the lottery winners and the accident victims to rate how happy they were at that stage of their lives, how happy they were before the life-altering event and how happy they expected to be in a few years. They asked them to rate how pleasant they found simple activities (talking with a friend, watching TV, eating breakfast, buying clothes, getting a compliment, etc.).

Seriously? Who’s happier, the person cruising in the wheelchair or in the Lamborghini?

Yes, the lottery winners were happier in the moment. The winners reported feeling more present happiness. But the people with disabilities rated their future happiness higher. They also enjoyed the simple things in life more: they had more appreciation for the mundane pleasures of things such as hearing a joke or reading a magazine. Actually, research shows a link between high income and a reduced ability to savour small pleasures. Experts blame it on hedonic adaptation — our tendency to just get used to whatever we have. Even a dramatic life improvement eventually becomes the new normal. You don’t smell the roses because they’re everywhere, any time of the day. And research has shown that our inner thermostats are set some-where between happiness and sadness: they can rise and fall depending on circumstance, but they generally return to that baseline. So, if you were a miserable moaner before hitting the jackpot, you’ll likely just be a rich miserable moaner.

In another real-life example, Markus Persson, who created Minecraft and sold it to Microsoft for $2.5 billion in 2014, reportedly bought a $70-million mansion, complete with a candy wall, vodka and tequila bars, designer fire extinguishers (because safety first, fashion second) and 15 bathrooms equipped with $5,000 remotecontrol operated toilets with air deodorizers and heated seats. But in 2015, he tweeted, “Hanging out in Ibiza with a bunch of friends and partying with famous people, able to do whatever I want, and I’ve never felt more isolated.” In another tweet, he said, “The problem with getting everything is you run out of reasons to keep trying, and human interaction becomes impossible due to imbalance.”

Now this could be super depressing to you. For me, it’s reassuring. It tells me that no single event or any material thing or external factor ultimately defines my happiness. Human beings are adaptable. A million dollars or a misfortune, over time, can become the new normal. Sure, with money, you’ll enjoy stylishly fighting fire with your Louis Vuitton extinguisher, but the riches may also make old pleasures seem less enjoyable.

So remember, there’s a better use of your money than playing the lottery. The odds of winning the Powerball jackpot prize are 1 in 292 million — and odds are that more money won’t guarantee that your days will be happier anyway.

YOUR HAPPY MONEY TO-DO LIST

If you find yourself thinking, “If I only had (insert anything), I’d be happy,” challenge it. Ask your partner or co-worker or friend to poke you (lovingly) if they ever hear you say that phrase. It’ll be like that awful baby shower game where you can’t say “baby” — but for your life.If you’re relying on something (or someone) to make you happy, you’re wasting your time and energy. If affirmations are your jam, write this down and stick it somewhere: “I control my own happiness. ”Name three big things that make you happy regardless of money (good health or a loving partner). Now name three very specific things (sleeping in on the weekend, your jam on repeat). Repeat the exercise every time you feel crappy about your financial situation — or any situation. Stop playing the lottery. Now. Next time you want to play the lottery, buy someone a coffee or put the money into a donation box instead for a guaranteed happiness payoff.

MONEY TALKS

If you think more money would make you happier, how much more? How would your life be better with more money? Think of a time when you made less money. Were you unhappier then? How much? Think of some of your happiest moments from the last week. Would more money have made those moments better?

Special to the Financial Post Excerpted and adapted from Happy Go Money by Melissa Leong. © 2019 by Melissa Leong. All rights reserved.