Your Money: The Missing Manual

by J.D. Roth

In a 2005 issue of the Review of General Psychology, Sonja Lyubomirsky, Kennon Sheldon, and David Schkade looked at years of research to figure out what contributes to “chronic happiness” (as opposed to temporary happiness). Based on their survey, they came up with a three-part model: About half of your happiness is biological. Each person seems to have a happiness “set point,” which accounts for roughly 50% of your sense of well-being. Because this set point is genetic, it’s hard to change. Another 10% of happiness is based on circumstances — external factors beyond your control. These include biological traits like age, race, nationality, and gender, as well as things like marital status, occupational status, job security, and income. Your financial situation is part of this 10% — but only a part — which means it accounts for just a fraction of your total happiness. The final 40% of happiness comes from intentional activity — the things you choose to do. Whereas circumstances happen to you, intentional activity happens when you act by doing things like exercising, pursuing meaningful goals, or keeping a gratitude journal.