Saving Money and Running Backwards

Wealth has a curse. It’s called the hedonic treadmill. Its mission – and it is ruthless – is to move the goal post of your financial dreams, extinguishing the joy you thought you’d get from having more money once you attain it.

We’ve known this forever. People are pros at both adapting to their circumstances and fooling themselves that slightly better financial circumstances will solve their problems.

But my friend James Osborne, one of the sharpest financial advisors I know, and I discussed this curse the other day, and came up with a slightly different version.

What most people want out of savings is freedom and control. Less worry. Something to free up mental bandwidth from the “what if?” scenarios that narrate our money worries and desires. What many people really want from money is the ability to stop thinking about money. To stop caring about it so they can think about other stuff.

But (self-made) money is hard to make and harder to save. It takes work, sacrifice, patience. That makes you care about it more. Generally (there are many exceptions), the more money you saved, the harder you worked and more sacrifices you made, so the more you care about what you’ve accumulated. It’s a steel-toothed trap for those who want to save so they can stop caring about money.

What’s a common thing you hear from wealthy people in surveys about how they think about money? “I’m afraid of losing what I have.” This seems crazy to those with more modest means. But tons of savings, in the eyes of those who saved it, represents tons of hard work – from you, or someone who left it for you. You worked your ass off for it. So of course you’re paranoid about losing it. And of course it’s a treadmill, because savings often only scales when you sacrifice more. This also explains why people who didn’t work hard for their money – lottery winners, for example – often go broke. They have no sweat equity in their bank account.

Daniel Kahneman talks about how bad we are at predicting our happiness, as we dream about different circumstances in a vacuum while ignoring negative factors that come along with those circumstances. 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.

Same thing with money. It’s easy to dream about the joys more money will bring you while ignoring the sacrifice needed to make and save more money. So the dream perpetually feels better than the accomplishment.

This is compounded by the fact that some of the hardest workers can’t save much money. So you get disappointment at both ends: Working hard and worrying that it won’t make you rich, or working hard, getting rich, and worrying that you’ll lose it.

The solution, particularly after basic needs are met, is actively seeking contentment with what you have. That doesn’t mean you stop saving, stop putting in effort, stop sacrificing. It means you come to terms with the idea that the outcome isn’t a fountain of happiness. So if you’re going to grind, you better damn well enjoy the process.

This is easier said than done. And it’s counterintuitive. Which is why so many of us are sprinting on the treadmill.


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