Money and Happiness – Where Do They Intersect?

Financial security contributes to happiness because it removes the stresses associated with day-to-day living and, among other things, affords access to superior healthcare. But our increasingly materialistic lifestyle has tended to mask other, arguably more important, contributors to wellbeing.

Two major studies of happiness and wellbeing are the World Happiness Report, published annually by the University of Oxford’s Wellbeing Research Centre in partnership with Gallup, the UN Sustainable Development Solutions Network, and the report’s editorial board; and the Global Flourishing Study, an ongoing longitudinal research study being carried out in a collaboration between the Human Flourishing Program at Harvard University and Baylor University’s Institute for Studies of Religion, in partnership with Gallup and the Center for Open Science. Both rate happiness or wellbeing levels per country.

World Happiness Report

The report considers a range of factors affecting wellbeing, including GDP, inequality level, life expectancy (a proxy for overall health), social support, and community involvement (measured by generosity and volunteering). However, its global happiness ranking is based on a single question from the Gallup World Poll:

Please imagine a ladder with steps numbered from 0 at the bottom to 10 at the top. The top of the ladder represents the best possible life for you and the bottom of the ladder represents the worst possible life for you. On which step of the ladder would you say you personally feel you stand at this time?

In the 2024 poll, as has been the case for some years, the Scandinavian countries feature strongly: the first five places go to Finland, Denmark, Iceland, Sweden and the Netherlands, with Norway in 7th place. The United Kingdom and United States are 23rd and 24th respectively, and, out of the 147 countries polled, South Africa achieved a miserable 95th place.

Global Flourishing Study

The Global Flourishing Study looks at what it calls a “flourishing life”. The report notes that while the terms “flourishing” and “wellbeing” are often used interchangeably, wellbeing might be defined as “the relative attainment of a state in which all aspects of a person’s life are good, as they pertain to that individual”, whereas “flourishing” also includes the wellbeing of the community and environment.

The study considers six factors: happiness and life satisfaction; physical and mental health; meaning and purpose; character and virtue; close social relationships; and financial and material stability. Its scope is narrower – it surveys only 22 countries.

In an article for The Conversation, “What makes people flourish? A new survey of more than 200,000 people across 22 countries looks for global patterns and local differences”,  professors Victor Counted, Byron R Johnson and Tyler J VanderWeele noted that richer, developed countries did not fare well across all metrics. The top scorer was Indonesia, with Mexico and the Philippines also showing strong results.

“Richer countries, including the United States and Sweden, are not flourishing as well as some others. They do well on financial stability but score lower in meaning and relationships. Having more money doesn’t always mean people are doing better in life. In fact, countries with higher income often report lower levels of meaning and purpose. Meanwhile, countries with higher fertility rates often report more meaning in life,” the professors say.

The human factor

While these two studies have widely different results – one leaning towards developed countries, the other towards poorer ones – a common thread running through these and other happiness studies is the importance of social (face-to-face, not Facebook) connections.

In his now famous 2015 TED talk on a 75-year longitudinal study of Americans in diverse walks of life, “What makes a good life: lessons from the longest study on happiness”, Professor Robert Waldinger of Harvard Medical School said the research showed that striving for wealth and social status early in one’s career had no bearing on long-term happiness. It showed instead that:

• Social connections are good for us – people who are more socially connected to family, friends and community are happier, healthier and live longer;

• The quality of relationships matter – “good, close relationships seem to buffer us from some of the slings and arrows of getting old”, physically and mentally.

There’s a balance to be had between working and relaxing, between taking and giving, and between devoting time to your career or business and spending time with friends and loved ones. Wise folk find that balance.