Transcripts

Laura Rowley:
There's something called the "hedonic treadmill," you know when you have a great family you usually don't say, "Gee, I'm going to go out and get another one, cause this is so great." But we always do that with money and material goods and it's really hard to get off that treadmill.

Finance expert, Laura Rowley, author of the book, Money & Happiness has examined some of the interesting ways our brains work when it comes to money.

One of the big things is the hot cold apathy gap - a psychological term for when you're in a cold or neutral state, you have a hard time imagining what you would do or what you would say when you're in a hot state. And then when you're in a hot state it's hard to imagine what you would do or say when you were in a cold state. And psychologists have found in research that people who are not in a shopping situation underestimate the urge to splurge happens as soon as they walk into a mall. So, at the end of the day it's like, where did the money go?

Money may not buy happiness but Laura says…

A certain amount of money does make people happier. People who earn 50 thousand dollars or more in the United States have reported having fewer blue days than people who earn less than that amount. And that makes sense, there's a lot of stress when you can't pay the bills. On the other hand studies have found that our happiness does not rise in proportion with our incomes. They've done studies of lottery winners and people who earn more than a hundred million dollars a year and their happiness levels are just slightly higher than the average persons.

Tomorrow the importance of aligning your money and your values, I'm Mike Carruthers and that's Something You Should Know.