The hedonic treadmill is a behavioural psychology term that provides a useful insight into our financial wellbeing. It can provide a useful model for how quickly happiness like this fades after a purchase.
The research tells us that the fleeting nature of happiness is an inherent human condition. You will always have your ups and your downs, and being somewhere in the middle for the majority of the time is actually quite healthy. This makes sense, it’s like life’s contrast.
The hedonic treadmill also known as hedonic adaptation is a natural psychological process. Kind of like how if you chew gum, over time the flavour goes from a distinct taste to bland and indistinguishable. This is due to the process of habituation. Our sense of happiness is based around a similar feedback loop.
What Is Hedonic Adaptation?
Hedonism is the pursuit of pleasant sensations. As humans, we get an endorphin rush for acquiring new things or novel experiences. Buying a new gadget for example of hedonic happiness. It’s why people go shopping and why millionaires buy new yachts.
However, as you will have annoyingly experienced, this momentary burst of positive neurochemicals always wears off, resulting in a return to the default state.
Rather than chasing constant hedonism, we should attempt to build a positive default state that we can return to following bursts of pleasure. In essence, we should try to minimise the lows.
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Andrew | Mr Money Side Up
The Damaging Emotional and Psychological Fallout
Running full speed on the hedonic treadmill all the time and chasing hedonic pleasures is a fast way to burnout your wellbeing and finances. You will ultimately experience:
- Disappointment – with the unfulfilling nature of your purchases.
- Regret – You may feel guilty or regretful at how you spend your money.
- Exhaustion – As a result of trying to keep up with the latest products and in having to earn more money to chase the next hedonic purchase.
- Delay – You ultimately delay your financial freedom and savings goals. The short-termism of hedonism gives you a distorted view of what financial success looks like.
- Unmotivated – Ultimately you will be put off from saving money because you will perceive money as a means to run on the exhausting hedonic treadmill.
In fact, 40% of people and 25% of the UK workforce worry about money. This will potentially be a result of the hedonic treadmill and chasing an unattainable lifestyle.
How To Stay Off The Hedonic Treadmill
Now that we’ve conceptualised and developed a model of negative spending, we can find ways to break it down. The hedonic treadmill can damage our psychological and financial wellbeing.Therefore we can now build a practical approach for how to stay off the hedonic treadmill.
5 Ways To Jump Off The Hedonic Treadmill:
#1 Are you aware of your spending: The first step off maintaining a healthy spending lifestyle is to start consciously spending. If you are not aware of the habits and behaviours driving your finances you can’t change them.
#2 Ask yourself why: ask yourself why you are making these purchases and if the last time you made a similar purchase how long did it bring you happiness? Always try to predict the happiness that might be generated from your next purchase.
#3 Will You Benefit From Repeat Use: Some material purchases such as video games can give you a dopamine kick each time you use them. This is the opposite of buying an expensive bottle of wine on an evening out, where you benefit only once.
#4 Invest In Yourself: Like investing we want a long-term return on investment from what we spend money on. When you make a purchase, focus on possessions or experiences that have a slow-burning return on investment.
For example, reading a book will give you a slow release of feel-good neurochemicals in addition to providing an education gain. Exercise, educational resources or hobbies such as writing are all examples of this.
#5 Rotate Your Treats: We want to avoid habitation and get the full benefit from each purchase or experience. Therefore we need to avoid frequently repeating the same action to get the same kick. Rotate the things you enjoy so they feel more novel.
How To Get Off The Hedonic Treadmill And Start A Journey
One of the most beneficial approaches to money is the positive wellbeing that comes from knowing that you are securing a positive future for yourself and your family.
Visualising and chasing a financial future where you can design the lifestyle you want, keeps you off the hedonic treadmill. Approaching life with the end goal of increasing quality of life rather than a hedonistic please is a great journey to be on.
It’s important to focus on the fundamental building blocks of a healthy consistent dose of serotonin and dopamine. Rather than a short artificial burst of hedonic pleasure, is key. Once you step off the hedonic treadmill you can consciously pursue the things that genuinely enrich your life.
Building A Healthy Relationship With Money
Designing a budget around key aspects of life was one of the best things I ever did. This is because it focused my life around things that improved my wellbeing. By oritentating myself towards buying things that improved my health and psychology, I also realised it was improving my financial wellbeing too.
The result of getting off the hedonic tredmill of quick and easy spending was that it kept more money in my pocket. It wasn’t easy at first but my tracking my spending I was able to fully appreciate where my money was going and what added value.
Raising your concious awareness around saving and spending is one of the most important money habits. Money Dashboard was a really game-changer for me in this respect. It’s a safe and secure money tool which allows you to add your bank accounts, categorise and understand your spending.
Whilst you can still download Money Dashboard there are 3 other apps that you can download for free. They’re all a little different in their design but i’ve been super-impressed by all of them.
Start Your Journey To Financial Freedom
Creating passive income and financial independence is also a powerful way to maintain a higher bar for how we live our lives. For example, through increased socialising, exercising and engaging in fulfilling activities.
If you can enjoy every day a little bit more because you don’t have to spend 8 hours in an office or sitting at a desk, then this leads to a better quality of life.
You can find out how much you would need to invest each month to reach financial independence using my financial freedom calculator.
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