Money vs. Happiness: Which Would You Choose?

“Money can’t buy you happiness, but it does bring you a more pleasant form of misery.”

-Spike Milligan

Over the past week, you may have seen some headlines about a recent study that found many people will choose money over happiness. After looking more closely at the actual results of this study, I’m not so sure that’s the case…

Money vs. Happiness: Which Would You Choose?

Choosing money over happiness?

The study was based on a survey of three “populations” in which respondents were asked to choose between an $80k/year job with reasonable hours and 7.5 hours of sleep per night (Option 1) and a $140k/year job with longer hours and only 6 hours of sleep per night (Option 2). Each respondent was also asked which option would make them happier.

The soundbite is that, when given the choice between a job with longer hours and more pay vs. a job with more reasonable hours and less pay, many people choose the former — even if that higher paying job would result in decreased happiness. See here and here for examples. But is that really the case?

Interestingly, this pattern of choosing money over happiness was most evident in one population in particular. Care to guess which one? Yep, it was the college students.

In this population… Of the people that thought Option 2 (higher pay, less sleep) would make them personally more happy, nearly all of them (98%) chose Option 2. No real surprise there — when a higher monetary reward correlates with happiness, people choose the higher reward.

But… Of the people that thought Option 1 (lower pay, more sleep) would make them personally more happy, 44% still chose Option 2. In other words, for nearly half of these respondents the monetary reward (and all that it comes with) was enough to make them choose against their own personal happiness.

Interesting, but what about the other populations, which are much more likely to represent “average” Americans with real-world life experiences? Well, the results are quite different.

In the Denver sample…. Of the people that thought Option 2 (higher pay, less sleep) would make them personally more happy, nearly all of them (97%) once again chose Option 2. But of the people that thought Option 2 would make them less happy, the proportion that still opted for this choice fell to 20%.

What about that nationwide phone survey? Well, of those who though Option 2 would make them more happy, 95% went for it. But for those that though Option 2 would make them less happy, just 9% chose it.

Go beyond the headlines

These are interesting numbers no matter how you slice them, but the conclusion that people in general are choosing money over happiness isn’t quite as clear-cut as the talking heads would have you believe.

What’s really intriguing to me about these data is that the college students appear to be the outliers. Perhaps this reflects a generational difference, or maybe an educational difference, but I suspect it’s something different… I suspect that once people get out there in the real world, their views change.

The ramifications of working long hours, seeing your family less, and sleeping little begins to sink in, and people start to realize that there’s more to life than money. Whatever the case, the selective presentation of these results in the mainstream media is just one more example of why it pays to dig deeper than the headlines.

More generally, I’m curious to hear how you’d respond. Which option would make you happier? And which would you choose?

Source: Social Science Research Network, hat tip to @ManVsDebt

21 Responses to “Money vs. Happiness: Which Would You Choose?”

  1. Anonymous

    A few hours ago I turned down a job that would have paid me $35000 base more than I am making. What was keeping me from making the decision to jump at the money? Even though we can use it? Time. Time away from my young boys who already went through me being gone enough with my old company, time spent away not seeing them or spending that extra hour with them, time spent working more,exhausting myself just to get things off the ground. So…its time. Money? I cant take it with me or the things I have bought or earned in my life. I could get out of debt quicker but then the new company would eat me alive with long hours and little sleep. Money is nice but its also something that gives me only short term relief.

  2. Anonymous

    What is money suppose to make you,Happiness is the thing that every human has been searching for sense birth.His outlook on life is to be in bliss with a family he loves beyond all worldly goods.Conclusion than why would money be the ultrament goal of anyone with a stable mind and loves life the way God meant it to be.

  3. Anonymous

    I find myself in this current situation. My wife and daughter is in Philippines. I can easily transfer my citizenship to my daughter, but my wife it could take like 1-2yrs to petition her.

    I had been living in Philippines for about 2yrs, and decided to go back to the USA to find some different work since my previous biz failed.

    3 months back and now I have found opportunities that will allow me to go back within the next 3 weeks, but Now all of a sudden i got a Pretty decent offer as a banker.

    option1: go back to Philippines
    – be with wife and daughter right away
    – base pay of 24k/yr + Opportunities delegate and increase income – income can grow past option2
    – be paid on 1099 so I can maximize tax advantages
    – have at least $1,000/mo cashflow after expenses
    – work 6hrs per day
    – freedom to build multiple streams of income
    – still be able to petition my wife for future purposes

    or

    Option2: stay take job at Bank
    – 40k base + comm (potential 55-60k)
    – not be with family right away – Up to 2yrs to petition wife
    – MAYBE VISIT FOR FEW DAYS BEFORE STARTING JOB
    – maybe get her on some type of student visa to canada and visit on weekends, but this process could take a while to and is not guaranteed.
    – work 9-6pm (9hrs) and somtimes saturdays
    – more monthly cashflow, but within a $500 difference.
    – may be less mothlycasflow if i have to send her to school in canada to to be near.

  4. Anonymous

    im in a state of confusion myselft, I cant seem to decide if rather work in something that makes me happy or in something that brings tons of money in the house but i would hate it…Im so confuse and this artilce doesnt help lol…

  5. Anonymous

    We have times at our company when mandatory OT is in play. Sometimes it is 5 hours a week…sometimes it is 10. When we have said it is 5 hours it seems to be managable…work through your lunch, come in a little early or leave a little late everyday. When we instilled the 10 hour mandatory OT even though people worked it they were more miserable and short with their co workers and clients. it goes to show even if you made a lot of money the stress of having to work everyday that kind of schedule will take a toll on your entire life.

  6. Anonymous

    From a personal standpoint, I place a high importance on time; the unfortunate thing is that we often need to earn enough money to free up enough time for our future plans.

    I think we are truly financially independent when we have control over time.

    In my view, the question is a difficult one to answer. If I know that I don’t have a juicy government or corporate pension to fall back on, it might be best to take the higher salary and work harder while you have the energy and are younger.

    I spent practically all of my 20s and a good chunk of my early 30s working in high income roles, which mostly consisted working 6 to 7 days a week.

    My schedule today is much more manageable, but I think everyone’s set of circumstances are different and people need to determine what’s best for their situation.

    Nice post!

  7. Anonymous

    Isn’t it possible to have both money and happiness? When we have the money, we can bring our family to out-of-town trips, buy them clothes and toys, eat at fancy restaurants, etc. Seeing them smile, saying thank you, and making them happy also gives happiness to my heart.

  8. Anonymous

    Well, being financially independent would trump options 1 and 2 on the happiness scale, by far. Therefore, even though Option 1 would make me happier than Option 2, I would choose Option 2, bank a LOT of money over 5 years (My annual expenses are under $15000), and then quit, never having to worry much about money again.

  9. Anonymous

    Money is a medium of exchange. It is not happiness. All money does is allow portability in economy, so we’re not bantering our trade or labor for what we need or want.

    True, if you have more money you can purchase more goods and services. After some level of needs we end up excess. Some think this excess is good, but I wonder how many people at the other end of life, on their death beds say, “man, I wish I could have spent more time at the office, I really could made more money or done more, if I only spent more time in the office.”

    There’s a cute video by RSAnimate, adapted from Dan Pink talk about hidden truths behind what really motivates us, which I found apt. This article is phased in pure time sense which may be biased towards more relational people (those who gain a high value from relationships thus see the time difference in ability to what they want with extra time, type “A”‘s might say, buy I only need four hours of sleep at night). I wonder what would happen if you added, 80K doing some tasks you enjoy of 140K with longer hours at something you hate doing. In that proposition, it’s easy for me, the less money, because there is an inefficiency in the longer/more money, first I’d have to “buy” my way out of the hole of “what I hate” (presuming my emotional expectations are equal to when I was a child, when Christmas toy seemed to have a accelerated diminishing return on “utility” so by December 28, they lost a bit of their “happiness factor”). While not as good for the overall economy, less money for what I enjoy, I’d probably need to purchase less to “make me happy” while time to enjoy what I do have for longer, before needing my next “fix” on trying to ‘make me happy (presuming here $80K is a measure above ‘living wage’ [today, poverty I think is $24K for a family of four]).”

  10. Anonymous

    After just reading numerous articles about Steve Jobs passing away at the age of 56 one has to consider just how important your time is with your family when you have it because no one is promised tomorrow.

    If you take a minute and think about the one or two people who have ever truly loved you in your life you will realize it was the acts of kindness and inspiration that made you love them, not any financial gain or expenditure. I have some great memories of my grandmother and the wonderful things she did with me as a child and she never earned over $20,000 a year in her entire life. She had a loving family, prepared Sunday meals with 8 grandchildren present and never asked for a government handout.

    In the end, what good is money if you can’t enjoy it? People who say they would save the “extra” money and retire early are most likely the same people who will never make that kind of money anyway. The vast majority of Americans are in debt now, we spend more than we make, do you honestly think that making over $100k is magically going to change your way of living? Or will you buy a bigger house, a newer car, more expensive clothes? Will you take trips, and send your kids to private schools? Guess what, you make more and you spend more.

    I agree with the comment earlier about money being a means to an end, not the end itself.

  11. Anonymous

    I’m right there with Jim’s last scenario. Going from $50k to $80k and keeping my sleep habits would be great for me. Many people probably go for the big job because they think their family will be better off despite their own reduced happiness. Personally I think a couple extra hours a day at home with said family would be far more valuable to all involved than the non-taxed remains of $60k extra per year. My thoughts are academic because I am a single person so take them with a grain of salt.

  12. Anonymous

    The college students’ choice also reflects a student loan difference. At $140K, I could pay off my loans in just 2 years or less. 80K isn’t bad either…but loans that can never be discharged can really stress you out.

  13. Anonymous

    Personally I’m not sure which of the 2 choices I’d pick. It depends on my financial situation in general. It depends also on how the question is worded exactly. I’m currently closer to $140k/6hrs so I’d probably lean towards that. I don’t know which would make me ‘happier’ since that depends greatly on the details. I guess I’d have to go with $80k/7.5hrs in general.

    People sacrifice some of their happiness to accomplish specific goals. If I wasn’t married and planning for our future then $80k would be just fine. But I may need to work harder to get everything we want.

    I remember when I was in college I could get by on a lot less sleep than I can now that I’m a little older and I was also broke. I think the fact that the younger college students are young and healthy and probably generally more able to handle a little less sleep as well as generally broke would highly skew those results in favor of money over sleep.

    TO better understand the results of such a survey they should also ask people how much money they currently make, how high their expenses and how much sleep they currently get. If I’m up to my eyeballs in debt and currently make $150k a year then I’m a lot more likely to chose the $140k job with little sleep even though it won’t make me happy. But if I currently make $50k a year and get to choose between $80k and $140k then I’m a lot more inclined to go with the $80k and more sleep.

  14. Anonymous

    If I had to choose between those two options, I would definitely choose option 1 (less work and less pay). The specific, arbitrary numbers they used happen to line up such that the lower pay would be plenty to cover my household’s needs. However, obviously it is a false dichotomy – there are far more than two options. There are many people who work more hours for less money, and many people who earn a lot more money working 40 or less hours a week.

    I suspect the reason college students answered the way they did is because a) the question is still abstract to them and b) they are currently in a “goal” mindset where they are trying to finish their degree. Once they realize they are in a job/career for the long haul, they realize the trade-offs aren’t worth.

    The truth is that nobody (with rare exceptions) can survive long term on 6 hours a night of sleep. Sooner or later it catches up with you.

  15. Anonymous

    I think the people who choose money believe it will lead to happiness and that’s a mistake. Money is a means to an end, but it’s not THE end. I think we can find happiness no matter what. It’s in the important things of life. Money is only a temporary solution.

    Having said that, we do need it to live and function in society, but there is a good balance. 🙂

  16. Anonymous

    I think that money can lead to happiness. As long as it is spent on things that make you happy. In the given options I believe I would select option two. Hard work pays off and after some time I take the extra money I made and retire to do something I really enjoy.

    I think that is the sentiment of many who participated in the study. I will sacrifice my happiness now for future happiness with extra money. I would be interested to see what would happen if another condition was added to the options. Would you pick option 1 or 2 if you knew you would stay in that position for 20 years.

  17. Anonymous

    I’m staring this decision down right now. And am leaning HARD to happiness. Trading 8 hour days for 10 hour days just seems like a bad deal, even if it came with $40-60k more. The trick with the longer-hours/less-happiness job is that you wouldn’t necessarily have time to enjoy all that extra dough!

    I think a little more cash (I should ask for a raise) would be perfect, but being able to come home at a reasonable hour when my 2 year old is still awake is pretty tough to put a price on.

  18. Anonymous

    I suspect that the college students are rationalizing their choice by assuming it is a temporary period of hardship. If they equate money to future happiness, then working the longer hours now may enable them to switch to the shorter hours later with more security.

  19. Anonymous

    Great analysis. For me, age plays a role. When I was younger, I think I might have been able to put up with a more demanding job and less sleep in return for higher pay, but as I’ve grown older (and perhaps my own financial stability plays into this as well), I value my time more. I’d rather work less, have more time for refreshing sleep to lower my stress level, and I’d be willing to accept a lower salary. But then again, that’s a *significantly* lower salary, so who knows.

Leave a Reply