Hedonic adaptation is one of the key forces that prevents us from becoming happier. It misleads us into thinking that the wrong things will make us happy.
Instead, we end up on a treadmill where we continuously adapt to our new situations and material possessions and stay at the same level of happiness.
Today, we return to hedonic adaptation to see how it impacts the intersection of money and happiness.
Survival vs. Happiness
Hedonic adaptation is an important evolutionary trait that no longer serves us well.
Essentially, we were designed so that we would quickly adapt to our surroundings and possessions. This was extremely important to our survival as a species.
We never got comfortable with the amount of food we had stockpiled, which protected us when famine struck. We always wanted to be safer and more well protected, which served us well when predators came around.
We used adaptation to survive all around the world from the Amazon to the Sahara and from the Himalayas to the plains of the Midwest. Our ability to adapt is central to who we are as a species.
The problem is that adaptation is designed to make survival easier, not happiness.
Fight Your Instincts!
When it comes to money, this means that our instincts will be to buy more, more, more. We want bigger and better and newer.
It also means that our instincts won’t make us any happier and that buying more stuff is not a route to happiness.
This tendency towards expecting more material goods to make us happy has been studied extensively by psychologists. What they’ve found is that not only is materialism not a route to happiness, it actually causes more unhappiness.
In one particular study, researchers talked to 12,000 college freshmen around the country in 1976 and then measured their happiness 19 years later, when they were 37 years old. The students whose primary goal at 18 was to make money were less happy than their peers even two decades later.
The Cost of Materialism
This makes sense.
As we’ve already learned, new things give us a quick injection of happiness before we get used to them and revert to our old levels of happiness. However, we are now at our old level of happiness with a newly raised cost of living.
If I upgrade from a Toyota to a Cadillac, I’ll be happier. Briefly. And then I’ll go back to my baseline, but still have the bills from the Cadillac. If I want another happiness boost later, I’ll have to upgrade to a BMW.
Eventually I’m making monthly payments on my Bugatti without being any happier than I was with my Camry.
These happiness boosts become more and more expensive. If you believe that material goods are the route to happiness, then you need to keep pushing through to the next, more expensive level.
And you will keep being disappointed with the lack of lasting happiness.
Make it a Treat
So how do you avoid letting hedonic adaptation lay waste to your budget without improving your happiness?
The first is to avoid letting yourself get used to a purchase. Make it a treat.
Buying a nice new couch will feel great for a little while. Using that same money to get a new bouquet of fresh flowers every week for a year will make you happier over the long term. The happiness boost from the flowers will be less than that of the couch, but you can renew it every week as the old flowers die.
Instead of renovating your house, set aside that money for a weekly date night or for a series of dinners out with friends.
Intermittent happiness injections are going to be a better use of your money than big purchases.
So if your morning latte makes you happy, then go ahead and buy it. Savor it. Tell the personal finance experts to shove it.
Targeted Spending for Happiness
The other approach is to focus your spending on areas that have been proven to make people happier.
According to psychologist Sonja Lyubomirsky, “the purchases or expenses that will yield the greatest emotional benefit are those that involve goals that satisfy at least one of the three basic human needs – (1) competence (i.e., feeling capable or expert), (2) relatedness (i.e., belonging and feeling connected to others), and (3) autonomy (i.e., feeling a sense of mastery and control over one’s life).”
Spending in these areas has been proven to boost happiness without the addictive qualities of purchases tainted by hedonic adaptation.
Where is Your Money Going?
We will be spending much of the rest of the month getting more specific on these areas of spending. We’ll look at specific studies on spending money on your friends and donating money to charity. We’ll look at the research on spending money on experiences rather than things. We will examine how to get more happiness out of our stuff and how to know when more money will actually make us less happy.
In the meantime, think about your spending. Are you spending money to develop your sense of competence? Relatedness? Autonomy?
If not, think about where you could spend more to boost those aspects of your life.
If that means cutting spending from other areas, then see what you can cut. If it means spending more money altogether, then consider doing that.
What good is having a whole bunch of money in the bank if you aren’t using it to buy yourself some happiness?
Join the Conversation!
Have you noticed hedonic adaptation in your life? Have you adjusted your spending? Do you spend on developing competence, relatedness, and autonomy? Tell us about it in the comments!