FACT: Money Doesn't Buy Happiness!

FACT: Money Doesn't Buy Happiness!

I'm lucky that I've had the opportunity to step back from my life as a consumer and study why we shop the way we do.

I've been a professor of marketing at Baylor University for the past 22 years, and I’ve studied the psychology of consumer behavior—materialism, compulsive shopping and credit card abuse—for about 15 years.


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And I can tell you, unequivocally, that the pursuit of material possessions doesn’t make us happy. In fact, the more we accumulate, the unhappier we are.

A Career Spent Immersed in Bad Spending

My second job out of college was at the consumer loan division of a bank. Our specialty was consolidation loans—people would combine all of their consumer loans, credit card bills and other obligations into a single, lower monthly payment that was secured by their homes as collateral. Translation: If they didn't pay, they'd lose their house.

My boss would often take out large scissors that he kept for such situations and cut up the debtors' credit cards, so (in theory) they would not use them again. Yet, like clockwork, in six months to a year, the same people would be back in the office with new bills—and years left to pay on their original consolidation loan.

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I realized that people so badly want to spend that they're willing to jeopardize their homes. Something was off in how we spend, and how possessions relate to our happiness. So I went back to school to get my masters degree, and then a Ph.D., in marketing—and what I found would change the way I live my life.

Our Broken Culture of Consumerism

We believe that if we just have a little more—more money, more objects—we'll be happy. But that's just not true, especially in America.

Just look at the GDP, which is about 70 to 80% of consumer spending. It has gone up almost continuously since the 1970s, but when you compare that to the general level of happiness of American people, our happiness has flatlined. We are no happier in 2012 than we were in 1970, despite the fact that we’ve spent more money every year since 1970.

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It doesn’t take a rocket scientist to figure out that all of this spending isn’t delivering the happiness it promised. So why can't we just stop?

In my research, I've found five big reasons why we keep spending more and more:

Modern-Day Envy

Humans look to other humans to gauge their status in society—and they often use outward trappings to judge. This wasn't so much of a problem 60 years ago, when keeping up with the Joneses simply meant peering over the fence to see if your neighbor had a new Chevrolet.

Now we have "keeping up with the Gateses." With today's internet and media saturation, we see people living in opulent wealth, and we are inevitably going to get frustrated if we can't achieve the same things—only a few people can have giant houses and Rolls Royces.

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Effective Advertising

As a marketing professor, I've taught thousands of students how to cajole—and, in some instances, manipulate—consumers into buying products they often don’t really need. Our consumer culture is stoked by advertisers: Last year, they spent about $135 billion to convince us that happiness can be bought online or in the store.

Pleasure Seeking

We are also programmed to consume—to get pleasure from accumulating things. When we go shopping, our brains release dopamine and serotonin (the same thing that happens when we eat delicious food or listen to good music), which reinforces our shopping behavior.


When bad things happen, some people go shopping. It's what we call "mortality salience." For most of us, our most salient fear is dying, and we use different coping mechanisms to handle it, such as surrounding ourselves with possessions as a distraction. Shopping and accumulating gives (shallow) meaning to our lives.

We continue to buy, but we don’t get any closer to happiness—we just speed up the treadmill.

The Treadmill

This is what's known as "adaptation theory." When bad things happen to human beings, we quickly adapt, which is usually a good thing. But when we talk about shopping or spending, it works against our best interests.

First, you want your own apartment. Then you want an apartment with an office. And then you want a house with a garage ... until you want a bigger house. We adapt to each new baseline, producing a treadmill of consumption. We continue to buy, but we don’t get any closer to happiness—we just speed up the treadmill.

We're Just Humans, After All

When we've had a bad day or have feelings of inadequacy, we may go after something that will boost our happiness. The problem is that we feel a little better for a short time—not because the products make us feel better, but because we distract ourselves from life's worries. Our problems are still there.

That’s part of who we are as human beings, so don’t beat yourself up when you spend more than you need to—it’s part of our DNA. That said, I'm proof that you can get off the shopping treadmill. Here's how I tamed my own shopping habits:

Avoid Temptation

I don’t watch a lot of TV because it stokes the consumerism flames. You can’t totally remove yourself from advertising, but the more you can, the better. It’s easier to avoid temptation than it is to resist it.

RELATED: 7 Reasons TV Is Ruining Your Life

Adopt a Long-Term Perspective

What is most important in my life? Taking care of my family, providing for college and my retirement. Before each purchase, I consider the opportunity cost: If I buy this today, does it mean that I won't be saving enough money for retirement or that vacation that I want to take?

Now when I see an expensive car, the first thing that I think is, "Can you imagine what he must be paying in monthly payments? That’s gotta cost $600 a month! That’s $300,000 by retirement!"

Cut the Plastic

In the research field, we call credit cards spending facilitators. When we pay with a credit card, it’s relatively painless ... until the bill comes. When people use cash or checks, they spend less money.

Keep a Spending Journal

For two weeks, write down every single expenditure. It makes you more conscious of your spending—and you’ll shell out less. Don’t want to keep a journal? Track your spending on your phone using a budgeting app!

Pay Yourself First

That’s the best piece of advice that I can give. When money hits our checking accounts, it has a tendency to magically disappear. So set up automatic withdrawals for your vacation fund, retirement fund and your emergency fund.

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Money isn't an evil in and of itself—how we use it determines whether money is a positive in our lives. It’s time for us to put away selfish pursuits, get out from under possessions and rediscover the true meaning of happiness.

Dr. James RobertsDr. James Roberts is the Ben H. Williams Professor of Marketing at Baylor University in Waco, Texas. He's also the author of "Shiny Objects: Why We Spend Money We Don't Have in Search of Happiness We Can't Buy."


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