For the past few weeks we’ve been talking about the book, Happy Money: The Science of Happier Spending by Elizabeth Dunn and Michael Norton. It offers some fascinating insights for freelancers. Start with our Happy Freelancer overview to get the basics, but the short version is that if money can’t buy you happiness, you’re spending it wrong.
Here’s the thing: Making more money will not make you more happy.
It goes against everything we believe, especially in capitalist America where more is better. And in some cases it is true—if you don’t have much money, more will make you happier. If you’re living in poverty and you suddenly double your income, that money will make an appreciable difference on your standard of living. A little more money will take care of all that worry, fear and dread about how you’ll provide for your family.
But there’s a point of diminishing returns. Once your basic material needs are covered, more money doesn’t make you more happy:
“In the United States, once people are earning around $75,000 per year, making more money has no impact at all on their day-to-day feelings of happiness” (xiv).
What?! So all our dreams about striking it rich are wrong?
Yep. In fact, people who win the lottery often lose their friends and go bankrupt. More money does not make you more happy.
Why not? It’s kind of simple:
“Around the world, income has surprisingly little influence on whether people smile, laugh, and experience enjoyment on a typical day” (xiv).
In fact, it gets even worse. Not only does more money not make you happier, but money actually corrupts. Dunn and Norton explore several examples of how even thinking about being wealthy made people less kind. In one study, even looking at a picture of money made people more withdrawn and isolated.
Since more money doesn’t make you more happy, most of Happy Money explores how to be happier with the money you do have. It mostly comes down to choices about how we spend our money. But this offers a valuable insight.
You Don’t Get Rich Freelancing
Sometimes freelancing is painted as a way to break free from the limited income ceiling of a salary. You’ll make more money by being your own boss! Entrepreneurs have unlimited income potential!
Maybe. But that doesn’t mean you’ll be happier.
Recognize that earning more is not the ultimate goal. There’s nothing wrong with earning more: Maybe you have debts to pay or you’re building up a reserve fund. But recognize that always making more is not going to make you happier. Keep that in mind as you choose projects.
Bill Erickson has talked about growing his business in other ways than simply making more money: “By being more efficient, I can spend less time and make the same salary.”
Simply put: Money shouldn’t be the only way you determine success.
We’ve talked to lots of freelancers—none of them have talked about the joy of making more money. Even when we asked people what they love about freelancing in our Prosper series, more money was never the answer.
Money is a means to an end. Don’t focus on it and don’t allow it to consume you.