How much money do you need to be happy?Free Money Doesn’t Help | Opinion

I work all night, I work all day to pay the bills I have to pay

Aren’t you sad?

And never seems to leave me a penny

This is too bad.

– “Money, Money, Money”, Abba

Somewhere in the US, most likely in Illinois, someone is a newly born billionaire (or just a multimillionaire after taxes).

If the person running the Mega Millions lottery finds that person—the one who picked the right number at the gas station in Des Plaines—Americans will again reinforce the idea in their minds that the The chances are slim. Getting something for nothing is the key to happiness. That’s okay, as gobankingrates.com reported on Tuesday, “The odds of winning a Mega Millions or Powerball are slim — but if you’re somehow successful, the odds of your life going into chaos are actually pretty good.”

The site documents the tragic stories of 23 winners who ended up broke and grief-stricken despite having become millionaires.

Of course, not all lotto winners end up this way. But the country seems determined to ignore the notion that free money is not the answer to poverty, or that financial literacy may instead be the real path to monetary happiness.

A new study from Harvard Business School and the University of Exeter looks at the effects of handouts to low-income people and finds little sign that life is getting better, but plenty that it is getting worse.

The study was used by some as a statement about federal pandemic stimulus payments, which have been blamed for spurring inflation. But there is a bigger lesson here about the need for financial education, evidence that this need transcends all income levels, and the dangers of free government funding.

The study, conducted early in the pandemic from June 2020 to May 2021, divided 5,243 Americans “living in poverty” into three groups. One group received a one-time unconditional payment of $500, another received $2,000, and a third, the control group, received nothing. The normal median income for participants was about $1,000 per month, not counting government assistance of more than $500 per month.

The results of it? The $500 group spent an extra $26 a day for the initial period, while the $2,000 group spent an extra $82 a day. Most are spent on credit cards, Paypal or Zelle, food, shopping, transportation and bills.

But their situation did not improve. “We did not find any evidence that the treatment reduced the prevalence of bank charges, such as overdraft fees, insufficient fund charges, late fees or cash advances,” the study said. “In less than four weeks, any treatment There were no significant differences between the groups in bank balances (savings) or transactions.”

What’s more, compared to the control group, those who received the handouts reported being less satisfied with their jobs, experiencing greater financial stress, getting less sleep, and feeling more lonely and anxious.

This may be because these groups are not getting enough money, the researchers said. A check for $2,000 might be enough to give people a better idea of ​​how much they really need.

I don’t discount. Those living in extreme poverty have few opportunities to save or invest, hundreds or even thousands more, little change.

But even the researchers concluded: “…the participants in our study who received the money seemed conflicted about how to spend the money, suggesting that poor people may face difficulties not only with their ability to invest, but also with how to decide how to Difficulty using the money. Investing.”

Wall Street Journal editorial writer Alicia Finley offered another lesson: “…pay reduces the reward for work, which reduces personal well-being.” Moreover, making money gives people “a sense of personal agency that encourages them Make better financial and health decisions.”

A lot of research has been done on the relationship between money and happiness. An oft-cited study from 2010 showed that happiness increased by as much as $75,000 a year (about $97,000 today) before leveling off. Another 2018 study put life satisfaction at $105,000 in North America (about $120,000 today). Another in 2021 said there are no limits – the more you earn, the happier you are.

Tell Jack Whitaker that he won the $314 million Powerball jackpot in 2002. According to gobankingrates.com, he blundered generously. He gave everything, his wife left him, his house burned down and he died 18 years later.

Clearly, happiness and financial success is not just about getting a ton of money.

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