Laura Rowley Money & Happiness

We have all heard versions of this "life is too short" platitude before. And while I don't place much stock in what celebrities have to say, their statement bothered me. Just what kind of happiness are we talking about here? It's a critical question for anyone who seeks financial wellbeing, because if we're not clear on what happiness looks like, we can burn through a mountain of cash searching in vain to find it.

The "Smiley Face" Definition of Happiness

Should we define happiness as moment-to-moment episodes of joy that come from doing what pleases us? Is happiness that feeling of immediate gratification that some people get from blowing four bills at the racetrack, and others from building homes for the poor?

This "smiley face" definition resonates with many people, at least unconsciously. Asked how content they are with their lives, people often rate themselves happy or unhappy depending on what's affecting them at the moment. For instance, in a study led by German psychologist Norbert Schwarz, researchers randomly phoned men in a working-class suburb shortly after the broadcast of the international soccer championships. Germany won the first match; the second was a tie.

Researchers initially queried the men about the quality of the TV coverage, then asked if they could pose a few questions unrelated to the game. They asked the men to rate their happiness with life as a whole, as well as their satisfaction with their income and work. Those interviewed after Germany won the soccer game rated their global wellbeing several points higher than those interviewed after the game ended in a tie. An upbeat mood translated into a happy life.

Researchers have also found that when they direct someone's attention to a specific domain of life, people often make comparison-based evaluations. In a separate experiment by Schwarz, interviewees thought they were taking a visual imaging test. An apologetic researcher told one group that due to a shortage of space, they had to conduct the test in a maintenance room. The room was dirty, smelly, and overheated, with poor lighting. Another group took the test in an office furnished with comfortable armchairs and flowers.

After finishing the visual exercise, subjects were asked to complete a survey that included questions about campus housing and their overall happiness. Those in the pleasant environment rated their lives slightly happier than those who took the test in the uncomfortable room. But those in the maintenance room rated their campus housing better than those in the pleasant office -- indicating they were comparing their dorm rooms with the immediate dank surroundings.

Wayward Desires

Faced with the thorny task of answering, "How happy are you?" we tend to shortcut to current mood as a barometer. Happiness is a soccer victory, a warm puppy, a Porsche, scoring your size at a Nordstrom shoe sale. This is clearly a spurious method of evaluating our lives as a complex whole.

On the other hand, big-picture happiness certainly relates in some measure to getting the things we want, vs. being frustrated and dissatisfied. For my last book, I interviewed Sharon, a 40-something mom of two in suburban New York. Her husband took a buyout from his employer and started his own consulting business, with unfortunate timing: He opened shop just before the September 11 terrorist attacks.

Money was tight, and they began carrying credit-card debt for the first time. She wanted to move to a new home, upgrade her car, and go shopping with friends. She said, "I know I'm very lucky -- I have my house, my kids are healthy, they're the joys of my life, I have a great husband. I do consider myself very happy. But when people say money doesn't buy happiness, I think that's a load of crap.

Isn't happiness really about desire fulfillment? Julia Annas, a philosophy professor at the University of Arizona and author of "The Morality of Happiness" (Oxford University Press), finds this definition troublesome. We can't define happiness in terms of getting our desires fulfilled, she says, because they may be based on addiction, obsession, or plain old faulty reasoning. Our desires may also be warped by social pressure -- compelling us to buy things we don't need with money we don't have to impress people we don't know -- as the old adage goes.

The Joy of Flourishing

When Aristotle addressed the topic of happiness, he used the term eudaimonia. It has been translated from the Greek as "happiness" but is more closely related to the idea of "flourishing" -- creating a successful life over time. Eudaimonia is not about our state of mind or our feelings. It's about taking action -- based on recognizing and moving toward a larger purpose in life. For Aristotle, happiness is about doing things -- doing them to the best of your ability, with excellence as a goal. Sharon, in fact, found a certain measure of eudaimonia this way. Instead of buying stuff, she spent more time exercising, volunteering at her children's school, and visiting breast-cancer patients in a local hospital.

In a materialistic nation that claims the pursuit of happiness as an inalienable right, I take great comfort in Aristotle's definition of happiness. Because frankly, I find long-term flourishing demands a great deal of short-term, well, unhappiness -- at least if you go by the smiley-face definition.

Achieving financial eudaimonia demands two things: Knowing what you want to accomplish with your life, and then finding the discipline, patience, persistence, frugality, creativity, and sense of humor to make your money conform to your goals. Happiness is measured in the achievement of values and priorities, rather than how we feel at any given moment. The only way to measure financial happiness is to track your progress toward goals that are uniquely about you and your purpose in life.

So, yes, don't waste a day being unhappy.  Just know that sometimes what makes you happy is not what makes you flourish.