If there is one thing you could have that would give you a better life, what would it be?

If you’re like many people, you would say more money!

How does money relate to your current level of life-satisfaction? As long as we have enough to get our basic needs met can we be satisfied?

Depending on the culture we live in, money and financial wealth are common aspiration, and a valued sign of success and prestige.

Though, how does our level of financial wealth really relate to happiness?

Some research offers insight that money in relation to life-satisfaction is subjective and doesn’t necessarily have a direct relationship.

According to this research, it’s not money that makes us happier, but our perception of money and what it allows us to do. For instance, it provides a greater sense of control, and can offer us a chance to create the life we truly desire.

It comes down to having a sense of control and satisfaction with our current financial situation.

A sense of control

Research reveals that the level of perceived control in our life completely mediates between life-satisfaction and actual wealth. In this sense, regardless of actual wealth, feeling like we have control and can manage life is what’s really important.

Consider someone who is very wealthy, but has no contentment with life and just worries and obsesses.

Though, on the other hand, financial wealth seems to offer a greater sense of control for many people. When we don’t have to worry about paying our bills and putting food on the table, it provides more security and a sense of control. It offer a buffer against stress during times of transition and shock.

For instance, if you’re car breaks down, it you can afford to buy a new one or get it fixed, this is a much less distressing event, compared to if you didn’t have the financial resources to deal with this dilemma.

Similarly, feeling a sense of control will likely lead people to pursue their desired life outcomes. If you felt capable and safe to make changes that will lead to greater satisfaction, you would probably be more likely to better your life.

Control and life-satisfaction are involved in our job, career, and the ways in which we generate income, and life-satisfaction contributes to higher income as well.

So, how can you build a greater sense of control in your life?

Satisfaction with our financial situation

It’s not the financial situation itself that impacts life-satisfaction, but simply being satisfied with what we have. If we are content with our current circumstances, actual wealth doesn’t have a significant direct impact.

Two people who make the same amount of money can have a completely different level of satisfaction with this income.

One person may feel grateful, fulfilled, and sufficient, while another may feel inadequate, deficient, and disappointed.

This relates to the hedonic treadmill, which is a tendency to return to a base line level of happiness despite life changes. Even when people win the lottery or obtain a great amount of money they eventually return to their previous level of happiness. This happens because we adapt to what we have and begin to view things from this new perspective and expectation.

It’s not how much we have but how we perceive it. The value of actual wealth is subjective.

No matter what your situation, finding ways to increase your sense of control and developing an attitude of gratitude and appreciation may be more important for life-satisfaction than financial wealth.

Photo credit: Mauropm

Resource

Johnson, W., & Krueger, R. (2006). How Money Buys Happiness: Genetic and Environmental Processes Linking Finances and Life Satisfaction. Journal of Personality and Social Psychology, 90(4), 680-691.