OUR STANDARD OF LIVING has more than doubled over the past four decades. Has all that extra money bought happiness? Not a chance. In 1972, 30% of Americans described themselves as “very happy.” As of 2016, we’re still at 30%, according to the latest General Social Survey.
Over the 44 years, there was a slight uptick in those describing themselves as “pretty happy” and a tiny decline in those who said they were “not too happy,” but neither change was significant. Meanwhile, over this 44-year stretch, inflation-adjusted per capita disposable income rose 120%.
Why hasn’t our improved lifestyle made us happier? There are three key explanations. First, and most important, we tend to adapt to improvements in our standard of living. Our initial delight at, say, a new purchase or a pay raise quickly gives way to dissatisfaction. Second, we focus not just on our absolute standard of living, but also on how we compare to others—and, for most of us, there will always be plenty of folks who have more. Third, we simply aren’t very smart in how we use our money.
What to do? Check out HumbleDollar’s advice on how to squeeze more happiness out of our dollars, as well as our lists of nine simple strategies for a happier life and five takeaways from happiness research.