Good mental health a much bigger factor in happiness than money

on March 22, 2017 / by Financial Mindfulness

Good mental health a much bigger factor in happiness than money.

Earlier this week Norway was named the happiest nation on earth, by the United Nations researchers, just ahead of Denmark.

Northern European countries dominated, with Iceland, Finland, the Netherlands and Sweden also in the top 10; perhaps there really is something to the saying ‘cold hands, warm heart’.

Australia rated 9th happiest, the United States was 14th and the United Kingdom 19th.

The bottom five places were filled by Rwanda, Syria, Tanzania, Burundi and the Central African Republic.

Why should we care about something that might be considered frivolous compared to harder-headed indicators like economic growth, interest rates and GDP? Because the world is changing and economics no longer rules unchallenged.

As the report points out: “In June 2016 the OECD committed itself ‘to redefine the growth narrative to put people’s well-being at the center of governments’ efforts’. Norway came first, it is pointed out, despite weak oil prices. The nation depends heavily on oil and gas resources, but in recent years has sunk profits from those industries into a transparent, ethical, future fund.

The UN team behind ‘The World Happiness Report’ used data from telephone and face-to-face interviews conducted by Gallup with around 1000 people from 155 countries over three years (2014-2016). Respondents were asked to rate their life on a scale of 0-10.

A key chapter of a report, ‘The Key Determinants of Happiness and Misery’, included some fascinating insights for companies, policy-makers and individuals interested in what makes us happy and unhappy, and how we can go from one state to the other.

The chapter focused on deeper research done in four countries: the US, UK, Australia and Indonesia.

“In all three Western societies, diagnosed mental illness emerges as more important than income, employment or physical illness.” The reverse was true in Indonesia, although in all four countries mental illnesses were more significant to our happiness and misery than physical illnesses.

The research found our levels of income and education per se weren’t major factors in happiness. Our tendency to compare ourselves with others in these areas was a bigger problem.

“Household income per head explains under 2% of the variance of happiness in any country,” the authors wrote. “Moreover it is largely relative income that matters, so as countries have become richer, many have failed to experience any increase in their average happiness. A similar problem relates to education—people care largely about their education relative to that of others.

“In all countries the most powerful [improvements to misery] would come from the elimination of depression and anxiety disorders, which are the main form of mental illness. This would also be the least costly way of reducing misery.”

The report made no mention of financial stress as a factor in misery experienced by adults, but it is worth pointing out that research shows clear links between money worries and those major mental health issues, anxiety and depression.

In 2013, researchers from the University of Southampton found people with unsecured debt (such as credit card debt, student and personal loans) were 3.24 times more likely to suffer “mental disorders” than those without unsecured debt and 2.77 times as likely to have depression. Tragically they were 7.9 times more likely to take their own lives.

It is no surprise then that the World Happiness Report’s researchers found addressing the emotional health of children was more important to set someone up for a happy life than academic qualifications. A child’s experiences at school were found to be more important than their test scores.

“What in turn affects the emotional health and behaviour of the child? Parental income is a good predictor of a child’s academic qualifications (as is well known), but it is a much weaker predictor of the child’s emotional health and behaviour.

The best predictor of these is the mental health of the child’s mother.” Disappointingly for dads, researchers found a father’s mental health wasn’t as important in determining happiness and misery as a mother’s.

Again, the report made no mention of mindfulness – this wasn’t the work to go into the array of potential solutions.

But with mental health such a huge factor in determining the happiness or misery of people in the US, UK and Australia, and other research showing money worries are linked with anxiety and depression, mindfulness around money is without doubt one important and useful tool in the search for happiness.