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Money doesn’t buy happiness – but financial control might

Which statement do you most agree with?

1. I create my financial destiny

2. I have very little power over my financial situation

These were the questions put to participants of a recent US study run by Psychology Today. The answers were assessed in correlation to income, age, education, gender and financial habits and had some interesting findings.

Firstly, yes there was a positive relationship between income and happiness but overall, when you only looked at income, nobody was very happy.

What was especially interesting was what happened when people were separated according to their feelings about personal power in the financial situation. It was found that people who believe that they create their own financial destiny were having mostly positive experiences with money, while those who felt powerless were having mostly negative ones. People with incomes less than $10k/year who feel in control of their finances are having a more positive experience with respect to money than those with incomes of $200k/year, but feel powerless.

The lesson? A sense of control over our personal finances, not money itself, may be the answer to peace, joy, pride and satisfaction in our financial lives.