FACT: Money Doesn’t Buy Happiness!

Money and happinessI’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.

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.

RELATED: Underindulgence: The Key to Happiness?

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: