Money and happiness

Can money buy happiness? Not really.

Sure, money is nice. But if your job makes you miserable, then guess what. You’re a miserable person with money. Learn how to balance the expected ROI of a college education with a career that will make you smile.

Podcast transcript


PETE: You’re listening to How Not to Move Back in With Your Parents here on the IU MoneySmarts Radio Network. I’m Pete the Planner. Alex, hello.

ALEX: It’s gonna get deep.

PETE: I think so.

ALEX: It is.

PETE: Do we have anything like Nag Champa or anything, incense or anything we can burn?

ALEX: And now I’m lost.

PETE: Is that what it’s called?

ALEX: Nag Champa? What is that?

PETE: Isn’t that like some sort of incense? Patchouli, anybody? No? All right, well, who knows.

ALEX: Potpourri?

PETE: Maybe that’s something I, okay here’s what were doing, does money buy happiness? Does money equal happiness? That’s a deep question.

ALEX: Yeah.

PETE: Right?

ALEX: It’s tough.

PETE: All right, so on some level, if you’re listening to this podcast, you’ve made a choice that you got an education to get an education. Or, you got an education, so you could earn a living, which is more financially related. I don’t think there’s a wrong answer cuz some people are more pragmatic in their thinking-

ALEX: Right.

PETE: What do you think? I’ll be honest. I went to college so I could get a job and earn a living.

ALEX: Yeah.

PETE: Is that terrible to say? Should I say that?

ALEX: No, one, it’s perfectly viable. A lot of people would agree with you. I’m on the fence a little bit. For me personally, specifically when it comes to, say, choosing your major and what you’re gonna major in, I went into college thinking I have to major in a specific field because it’s easier to get a job even though I hate it and it’s not what I would love to do, but it’s easier. But I ended up not doing that because there’s no reason for me to do that if I would get a job that I hate and I have no interest in. I wouldn’t be doing something I love even if it means making less money, it’s just not something I wanna do.

PETE: I had a friend in college who was gonna go to law school, got into law school. One day, I asked him what he planned on, what area of law? Just sitting around talking. And he said, whatever area of law makes me the most money. And I thought to myself, you know, wanting to be a lawyer, sure if that’s what you want to do, fantastic. But I got to think, that’s not really probably a healthy perspective to hold.

ALEX: No, you’re gonna be the most miserable millionaire ever.

PETE: Yeah, so let’s go into a couple of different things here. People oftentimes put pressure on their careers because they have poor financial habits at home. And so what they do is they look for their income in their career and money to solve problems that they maybe have caused themselves at home and so they’re like my job’s gonna solve my financial problems. But Alex, you’ve known me long enough to know that the opposite is actually true. If you take care of your financial life then you don’t put yourself in a corner where your job has to solve your problems.

ALEX: Yeah, you can have that freedom.

PETE: Right.

ALEX: So you could be in a miserable job making $100,000 a year and be totally screwing up your finances. But if you fix that, it will give you the freedom. You could even live the same way, same quality of life on a less salary because you’re tight in your finances and you could do something you like more.

PETE: What you hear people say a lot of times is I’m I’m not gonna be in field necessarily that’s gonna make me a lot of money. Fantastic, that’s okay, but here’s the problem. You cannot make decisions that then make your life about money. Your life’s only about money when you make it that way because of the decisions you make. There’s a couple of factors too, we need to talk about. Number one, we need to create the difference between pleasure and satisfaction. Because I think as we make financial decisions and even we look at our income, there is a major difference between pleasure and satisfaction and how we relate to that.

ALEX: 100% and when I think pleasure, I think I can do nice things, I can go out to fancy dinners, stuff like that. Satisfaction makes me think of achievement and quality of life, how I feel about what I’m accomplishing and contributing to the world on a daily basis.

PETE: I think money and food are an excellent parallel that people certainly can understand financial concepts when they think about food. So let’s say it’s lunch time, you’re hungry, you’re starving, and you want the gigantic-est cheeseburger that ever existed. That’s a word. A big cheeseburger, triple cheeseburger, with more bacon than there are pigs. You want a lot.

ALEX: Bacon as the burger instead of the meat, just bacon.

PETE: So you take a bite and what you’re looking for in that moment, because you got it, what you’re looking for is pleasure.

ALEX: Right.

PETE: Right? But then, the further you get away from that first bite, even an hour after the meal-

ALEX: It’s gone.

PETE: Pleasure’s completely gone and satisfaction itself is nowhere to be found.

ALEX: Right.

PETE: Okay, so you got pleasure, not satisfaction. Now, let’s say you’re very hungry and you’re like I’m hungry and you choose to eat a salad. Nothing against lettuce. It’s never done anything wrong to me, but I can tell you upon eating that the pleasure will probably be lower than it was in the bacon burger, correct.

ALEX: Right.

PETE: Hour later, does your satisfaction grow because you made the right choice?

ALEX: Possibly, if you I mean hey, maybe you saved money eating healthier or anything like that. At the end of the day too, the taste during, yet the pleasure an hour later. You’re gonna be full either way in the same place.

PETE: The satisfaction is a bigger factor because you made the right decision. Objectively, in every situation there is a right and a wrong decision whether it’s food going into your body, excercise, or financial in nature. A lot of times when people make financial mistakes they do it out of this quest for happiness, but it’s really an attempt to gain pleasure. It’s an attempt to have instant gratification and we all know that term. When you do what’s right, you seek satisfaction. And overall that can put you in a better financial position. And satisfaction is going to be more appealing, and actually more pleasureful, than pleasure itself. That make sense?

ALEX: Definitely, and if you can save money at the same time by doing it, that will give you opportunity to do other things.

PETE: Yeah, when you’re given a lot of resources, whether it’s money or time, when you got to college, one of the coolest parts about being a college student is that you are given the resource of time and you’re able to do whatever you want with that 168 hours a week. Whatever you want. And there’s pleasure in that, right?

ALEX: Definitely, which can hurt people.

PETE: Sure.

ALEX: A lot, because, hey, I’m gonna stay in and I’m gonna skip class. I’m gonna watch movies and play Xbox.

PETE: Pleasure.

ALEX: And not do anything. And then you get to the test and you fail it and you’re like well, crap.

PETE: Yeah.

ALEX: I’m in trouble. [LAUGH]

PETE: So the issue is upon graduation and financial resources are about you, even if it’s, let’s say you got a high paying job. Let’s say you’re that friend of mine from college who went to law school and got the got in the field of law that was the most profitable, you’re given a bunch of resources. And so what you choose to do at that point is pretty important. And you think again, you’re seeking happiness with your decisions, but your not. I know personally early in my career, I would define financial success as being able to afford whatever I wanted, right? Yeah.

ALEX: Be able to do what you want to do.

PETE: Right, which seems very reasonable, but it’s not. It’s actually a terrible definition of success, because you’ll keep chasing. Nothing will ever satisfy you and it has nothing to do with being resourceful. Now, as a pretty accomplished professional person, I can tell you my view point to success is to have as few financial obligations as possible. And that shifted everything for me. I’ve made more money, I’ve retained more money, grown my net worth because I focus on not getting whatever I want, but making sure what I want is actually a reasonable thing.

ALEX: And let’s be honest, beyond even financials, getting rid of all those obligations and debt will improve your life in other ways drastically. The stress will go down, you won’t have to worry about like all of that stuff hanging over your head. It’s huge, on a daily basis, your stress will affect your mood and everything on a second by second basis. It’ll affect you consistently.

PETE: There’s a weird thought that just occurred to me. Sometimes when people adopt the well, money doesn’t buy happiness, they do that and they adopt that in an effort to excuse their poor decision making.

ALEX: Yeah, your career and your financial decisions have to match.

PETE: Yeah.

ALEX: You can’t be on a different level on each one. They have to fit together.

PETE: Yeah, so they’ll maybe open store credit card after store credit card, go deep into debt, and be like, well, money doesn’t buy happiness. So it doesn’t really matter if I’m a financial wreck. Well, you kinda have to earn the right to carry that banner.

ALEX: Yeah, definitely.

PETE: This was deep.

ALEX: It’s big, it’s a big topic.

PETE: It’s important.

ALEX: You can’t shy away from it.

PETE: You’re not gonna learn this in a finance class. No offense, finance class. All right, if you want more information, go to and of course thank you for listening to How Not to Move Back in with Your Parents here on the IU MoneySmarts Radio Network.