During last night's debate, both Barack Obama and John McCain said the nation is facing its worst financial crisis since the Great Depression. But there's some good news: Money is only one part of what makes people genuinely happy, according to Ed Diener and his son Robert Biswas-Diener, who together wrote the new book Happiness: Unlocking the Mysteries of Psychological Wealth. Diener, a psychologist at the University of Illinois at Urbana-Champaign, is a leading expert on the science of happiness and a pioneer in the field of positive psychology, while Biswas-Diener, a lecturer at Portland State University, is called the "Indiana Jones of positive psychology" because he's studied well-being in some of the most remote places on the planet.
Money and happiness are linked, of course: Money can buy better medical care, education, and vacations, and it can translate, they say, into greater social status, feelings of control, and opportunities to make lasting contributions to society. But "the effect of money on happiness is often not large. Income appears to buy happiness, but the exchange rate isn't great. Extra dollars often amount to modest gains in happiness," they write. "More important than the absolute amount of your paycheck or your exact net worth is your attitude toward your money and the ways in which you spend it. Rich people who spend outside their means feel poor, and poor people who live within a careful budget feel secure. Regardless of your actual income, it is your material aspirations that color your mood. ... Even for people in wealthy societies, problems can arise when they become too wedded to the idea of striking it rich and accumulating wealth. Materialists are generally less satisfied with their lives than folks who highly value love, friendships, and other worthwhile pursuits."
True psychological wealth—the feeling that we are living "in a rewarding, engaged, meaningful, and enjoyable way"—depends more on the pursuit of important goals than on the acquisition of goods, the researchers say, and it involves strong relationships, an ability to adapt to life's changes, and a connection to something larger than yourself. —Heather Wax