The Psychology of Happiness: 13 Steps to a Better Life

(by J.D. Roth) a personal-finance expert

Many of us believe that money will make us happy, but it won’t. Except for
the very poor, money cannot buy happiness. Instead of dreaming of vast
wealth, we should dream of close friends and healthy bodies and meaningful work.

The psychology of happiness

James Montier, a “global equity strategist”, publish a brief overview of existing research into the
psychology of happiness. Montier learned that happiness comprises three components:

• About 50% of individual happiness comes from a genetic set point. Some of us are
just naturally more inclined to be cheery than others.
• About 10% of our happiness is due to our circumstances. Our age, race, gender,
personal history, and, yes, wealth, only make up about one-tenth of our happiness.
• The remaining 40% of an individual’s happiness seems to be derived from
intentional activity, from “discrete actions or practices that people can choose to do”.

If we have no control over our genetic “happy point”, and if we have little control over our
circumstances, then it makes sense to focus on those things that we can do to make ourselves
happy. According to Montier’s paper, these activities include…….

What does not bring happiness? Money, and the pursuit of happiness for its own sake. “A vast
array of individuals seriously over-rate the importance of money in making themselves, and
others, happy,” Montier writes. “Study after study from psychology shows that money
doesn’t equal happiness.”

If the United States is generally wealthier than it was thirty or forty years ago, then why aren’t
people happier?

Economist Richard Easterlin of the University of Southern California believes that part of the
problem is the hedonic treadmill: once we reach a certain level of wealth, we want more.
We’re never satisfied.

People’s desires and expectations change along with their material fortunes. Where an
American in 1970 may have once dreamed about owning a house, he or she might now dream of
owning two. Where people once dreamed of buying a new car, they now dream of buying a
luxury model.

“People are wedded to the idea that more money will bring them more happiness,” Easterlin
said. “When they think of the effects of more money, they are failing to factor in the fact that
when they get more money they are going to want even more money. When they get more
money, they are going to want a bigger house. They never have enough money, but what they
do is sacrifice their family life and health to get more money.”
The irony is that health and the quality of personal relationships are among the most potent
predictors of whether people report they are happy — and they are often the two things
people sacrifice in their pursuit of greater wealth.

Why aren’t rich people happier? Perhaps it’s because many of them are workaholics,
because they’re more focused on money than on the things that would bring them joy.
“being wealthy is often a powerful predictor that people spend less time doing pleasurable
things, and more time doing compulsory things and feeling stressed.”

In general, rich people aren’t much happier than those of us in the middle class. Yes, money can
buy happiness if it elevates you from poverty, but beyond that the benefits are minimal. So why
do so many people believe that money will make things better?

13 steps to a better life

What does all this mean to you? If money won’t bring you happiness, what will? How can you
stop making yourself miserable and start learning to love life? According to my research, these
are the thirteen actions most likely to encourage happiness:

1. Don’t compare yourself to others. Financially, physically, and socially, comparing

yourself to others is a trap. You will always have friends who have more money than you
do, who can run faster than you can, who are more successful in their careers. Focus on
your own life, on your own goals.
2. Foster close relationships. People with five or more close friends are more apt to
describe themselves as happy than those with fewer.
3. Have sex. Sex, especially with someone you love, is consistently ranked as a top source
of happiness. A long-term loving partnership goes hand-in-hand with this.
4. Get regular exercise. There’s a strong tie between physical health and happiness.
Anyone who has experienced a prolonged injury or illness knows just how emotionally
devastating it can be. Eat right, exercise, and take care of our body. (And read Get Fit
Slowly!)
5. Obtain adequate sleep. Good sleep is an essential component of good health. When
you’re not well-rested, your body and your mind do not operate at peak capacity. Your
mood suffers. (Read more in my brief guide to better sleep.)
6. Set and pursue goals. I believe that the road to wealth is paved with goals. More than
that, the road to happiness is paved with goals. Continued self-improvement makes life
more fulfilling.
7. Find meaningful work. There are some who argue a job is just a job. I believe that
fulfilling work is more than that — it’s a vocation. It can take decades to find the work
you were meant to do. But when you find it, it can bring added meaning to your life.
8. Join a group. Those who are members of a group, like a church congregation,
experience greater happiness. But the group doesn’t have to be religious. Join a book
group. Meet others for a Saturday morning bike ride. Sit in at the knitting circle down at
the yarn shop.
9. Don’t dwell on the past. I know a guy who beats himself up over mistakes he’s made
before. Rather than concentrate on the present (or, better yet, on the future), he lets the
past eat away at his happiness. Focus on the now.
 10. Embrace routine. Research shows that although we believe we want variety and choice,
we’re actually happier with limited options. It’s not that we want no choice at all, just that
we don’t want to be overwhelmed. Routines help limit choices. They’re comfortable and
familiar and, used judiciously, they can make us happy.
11. Practice moderation. Too much of a good thing is a bad thing. It’s okay to indulge
yourself on occasion — just don’t let it get out of control. Addictions and compulsions
can ruin lives.
12. Be grateful. It’s no accident that so many self-help books encourage readers to practice
gratitude. When we regularly take time to be thankful for the things we have, we
appreciate them more. We’re less likely to take them for granted, and less likely to
become jealous of others.
13. Help others. Over and over again, studies have shown that altruism is one of the best
ways to boost your happiness. Sure, volunteering at the local homeless shelter helps, but
so too does just being nice in daily life.

Remember: True wealth is not about money. True wealth is about relationships, about good
health, and about continued self-improvement.

I found that in my life a lot of my unhappiness came from my lusting after material
things. As I have been growing out of that phase and been a bit more content with
what I have I suddenly enjoy life a bit more

“Happiness is not getting what you want, but wanting what you have”.