Is Your Happiness Tied to Your Personal Income?

There are many ways to measure personal happiness. For some people, fulfillment and joy result from their earnings at work. But many consumers don’t rate their level of happiness strictly based upon the amount of money they bring home.

Family, friends, leisure pursuits, and satisfaction derived from helping other people all play a role in individuals’ perceived level of happiness. What are the biggest forces driving how people feel about themselves? British economist Richard Layard has done extensive research on the subject and shared the following surprising results about the mysterious origins of personal happiness.

Individual and Cultural Impacts on Happiness

You may have someone in your life that seems to radiate a happy disposition. Is that person a man or a woman? It’s natural to associate the message with the messenger, so if a woman or women you know appear happier than the men you’re acquainted with; it’s easy to conclude the feeling is tied to a particular gender. According to research there isn’t much of a difference between genders when it comes to personal happiness.

Is age a factor? Measuring happiness in various parts of the world, researchers have noted some trends. In affluent countries, it appears young people and older people are the happiest, but those living in their middle years experience a slump. In less affluent countries, the older population doesn’t seem to experience the same happiness rebound seen in richer countries. Quality of life issues related to illness and aging may explain this phenomenon.

Culturally speaking, corruption and lack of freedom appear to rob residents of happiness in parts of the world where these negative trends are present. On the other hand, cultures known for having a strong social fabric, where residents work together, in support of one another, show a higher sense of overall happiness. A high level of generosity among the citizenry of a particular region also has a positive cultural impact on personal happiness.

Income Isn’t as Important as You Might Think

According to excerpts from an interview with happiness expert Richard Layard, the amount of money you make doesn’t tip the scales one way or another, when it comes to being happy. For example, high perceptions of happiness identified in Scandinavian countries are more likely drawn from cultural bonds than personal wealth. According to widespread research on the subject, people’s sense of community and shared purpose, rather than their level of incomes, lead to happiness.

As incomes have increased around the world, it doesn’t appear happiness has experienced similar growth. In the UK, lending has stabilised, giving consumers access to various sources for short-term loans. Yet credit card debt continues to bloat Britons’ personal balance sheets. The materialism and individualism driving consumers to roll over credit card balances month after month may indeed be interfering with their potential for finding happiness. It appears to be the stress caused by credit card debt, rather than an individual’s earning potential, that has an impact on perceived personal happiness.

Mr. Layard’s research reinforces the notion that fulfillment and satisfaction derived from within are equally as important as the external stimuli many people perceive as happiness. Materialism works in competition with this principle, so it is thought economic policy needs to address more than just income levels. In much the same way inner conflict affects people preoccupied with external financial forces, economic policy that doesn’t acknowledge other sources of happiness fails to address the true scope of citizens’ needs.

Observers don’t always agree with the adage stating money can’t buy happiness. Despite opposing views, the old saying may hold true, according to international research conducted by a British economist. Although money does play a role in how people feel, research indicates it isn’t the primary force driving perceptions about personal happiness.

Paul graduated in 2001 with a degree in Finance. Since then he has gone on to work for several of the UK's most well-known financial institutions.

An avid blogger and a huge football fan, Paul is here to guide you through the ins and outs of personal finance and perhaps save you some money in the process!

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