Have you ever wondered why after working hard, saving diligently, and reaching that financial milestone you pursued for years that you don’t quite feel the lasting satisfaction you thought you would? Don’t worry, you’re not alone, and you may be taking a jog on a piece of exercise equipment you didn’t know you owned – the hedonic treadmill.
Anyone familiar with the phrase, “keeping up with the Joneses” may already know about the concept of the hedonic treadmill. The word hedonic comes from hedonism, a branch of philosophy that says the only motivating factors in life are pain and pleasure. The treadmill analogy comes from a 1971 research paper on the topic that found humans tend to reorient themselves to a baseline happiness level regardless of the great successes or unexpected tragedies they experience.
Academic research aside, most everyone has felt this at some point in their life. You show up early to work, stay late, take on extra projects, and finally get that promotion—and bigger salary—you’d been dreaming of. And yet, three months later the new title and designated parking spot have already started to lose their luster and that new paycheck feels oddly similar to the old paycheck.
One of my favorite work memories over the past two years is when a client introduced me to a pandemic-related malady called “What-A-Dump Syndrome.” It referred to the increase in noticing things around your home that needed updating as we all sat around the house more. The comment was said in jest, but I think it captured the feeling many of us have when we focus on how that ‘next thing’, will help us reach the contentment we’re seeking. As someone who did several home projects during the pandemic, I can say firsthand that I appreciate the improved look and functionality of my home, but I’m not markedly happier than I was beforehand. This is the hedonic treadmill in action, taking steps to achieve more but realizing we may actually be running in place.
So how do we step off this treadmill, or at least slow it down? One of my favorite personal finance writers, Morgan Housel, wrote on the topic and had this to say, “Dreaming about sitting on a beach brings more joy than actually being on a beach, because in the dream you’re not thinking about getting bit by mosquitos, or having heartburn from lunch, which is what happens in the real world.”
I offer you three ways to be more aware of the hedonic treadmill phenomenon and how it can positively affect your finances:
1. Practice Gratitude
Take stock of what you have, whether they be possessions, financial assets, relationships, etc. How are these things serving you right now? When was the last time you took a second to appreciate that fancy coffee maker you saved up for, or better yet, called a loved one to tell them how much you value having them in your life? These are ways to appreciate the people, places, and things in your life without spending any of your hard-earned money.
2. Do Something for Others
Feeling stuck in your routine? Engaging in habits that don’t leave you feeling better afterward? When was the last time you volunteered for a cause you believe in? Helped a family member with childcare or landscaping? Invited a neighbor over for dinner? You may feel a rush of excitement when eating your favorite dessert or filling up your cart on Amazon, but the research points to altruism as a more sustainable way to boost happiness levels.
3. Memento Mori
This is a Latin phrase meaning “remember that you will die”. Morbid, right? Viewed one way, yes, but in another light, it speaks to the opportunity to acknowledge you won’t be around forever and to spend your days and resources accordingly. Maybe this means paying for an annual vacation for the extended family, purchasing the classic car you’ve wanted for 30 years, or setting up a local scholarship in your name. All of these are ideas we’ve helped clients explore who want to be more intentional with their remaining time and treasure.
At Johnson Bixby we know the numbers really well, and we also realize good financial planning is so much more than that. If you want to review your priorities and how they fit into your financial picture, reach out to your planner today.