Anne Herrmann is a business psychologist. She is convinced that many smaller experiences spread over a year are more beneficial to our happiness than big holidays for which our expectations are very high. | Photo: Lea Meienberg

Money doesn’t interest me much. What does that say about me? 

Our attitude towards money is shaped by our upbringing. So it matters if, say, money and finances were a regular topic in your household, or whether those at home spoke with admiration of the wealthy – or if money worries were perhaps a factor in your everyday life back then. 

Does that mean I’m from neither a wealthy family nor a poor one? 

There are also people from wealthier backgrounds for whom money isn’t an issue. Studies today have shown that many young people claim that earning money is not that important to them. They presumably come from families with secure finances and are not at all aware of how much it takes to get the same standard of living as their parents. Money is often not discussed in well-off families – not because it isn’t important, but because it features less often as an argument when making decisions. In less well-off families, by contrast, children more often hear that certain things can’t be done because the money isn’t there. That kind of thing has an impact on children. 

Perhaps this youthful disinterest in money matters is also connected to the boorish image we have of the rich. A study in the US has shown that the rich are more likely to disregard the right of way in traffic, and they also steal photocopying paper more often. Does money corrupt our character? 

You can’t say that in such absolute terms. In the USA, people who earn a lot of money are also admired. And the reverse also isn’t true: not all poor people are good human beings. Simply being poor can also lead to wrongdoing. For example, you might convince yourself that your situation is an excuse for you to get things dishonestly. 

Many people in Switzerland worry about social decline, even though international comparisons show that the country is rich. Why is this? 

This is an interesting phenomenon, because Switzerland has strong social safeguards. You can’t drop down the ladder as low as you might in other countries. Overall, we can say that people react more emotionally to losses than to gains. This is called ‘loss aversion’: if you win CHF 800 in the lottery, you’re happy for a moment. But anyone losing the same amount will be angry about it for much longer, and experience that emotion far more strongly. 

So focusing on losses tends to make us unhappy? 

You can look at it that way. But it can also motivate you to safeguard yourself financially. That’s what keeps insurance companies in business. We prefer to pay a small annual amount so as not to live in fear of losing bigger amounts. At all costs, we want to avoid the feeling that we could lose something. It’s also loss aversion that drives our behaviour in this. 

In 1974, the economist Richard Easterling demonstrated that US society hadn’t become happier, despite the economic boom at the time. This paradox was later confirmed in other countries. How can we explain this? 

We compare our individual income and our own living circumstances with those around us. How do my earnings compare with those of people I know? This is what counts for us. And this is why our sense of happiness barely increases if our situation improves compared to the past, or if we are better off when compared to people in other countries. 

Does this urge to compare ourselves with others make us dissatisfied? 

Well, it doesn’t make us more satisfied, to be sure. What’s more, what we perceive in others is actually selective and irrational. If a neighbour buys an expensive car, then we think that he must be better off than us. But all he’s done is spend a lot of money on a car, and he’s now got less money at his disposal. If we compare ourselves with others on the basis of certain status symbols, it can make us less satisfied. But this also depends on our value system: It makes us less happy, especially if we’re convinced that such status symbols would actually make us happier. 

Doesn’t increasing growth and greater consumption make people happier in the long run? 

This is true for consumer society in the West today. But just a few decades ago, things were different. In the 1950s and ’60s, economic growth brought us a better quality of life. That meant more and more people were able to afford conveniences like refrigerators and colour TVs. The happiness all this brought was pretty limited in nature. This was partly because – to refer back to my former point – it meant that people couldn’t set themselves apart from others any more. But then the so-called ‘hedonic treadmill’ emerged: We get used to these conveniences and take them for granted. As a result, they no longer trigger feelings of happiness in us. 

According to research into happiness, investing in experiences makes people happier than investing in consumer goods. Why? 

There’s a saying that goes: ‘If money doesn’t make you happy, you aren’t spending it right’. Experiences and activities make us happier than material goods because we get enjoyment from the activity itself, from the anticipation of it, and from lovely memories afterwards. Such activities are also usually coupled with social experiences with people who’re important to us. This brings together the two happiness-promoting principles: ‘creating positive experiences’ and ‘social spending’ (in other words, sharing the experience of happiness with others). Many smaller experiences spread over a year have a more positive impact on our happiness than one big holiday for which expectations are very high. 

Since Covid, there’s been a boom in electronic payments, which means we no longer have what you once called the ‘pain of paying’. Does paying electronically tempt us to spend more than we have? 

It’s true that we indeed spend money more easily if the ‘pain of paying’ is absent. But electronic payments also mean we can track our expenditure afterwards. This enables us to see why our spending has increased, and lets us adjust our behaviour accordingly – e.g., by shopping less spontaneously on the Internet. It’s advisable to check your bank statements regularly for any unnecessary expenses. But if you really want to improve your financial situation, then you primarily have to look at the big expenses and ask yourself what you want to prioritise. How big does your apartment have to be? Do you really need a new car? Do you even need a car at all? Do all the insurance policies you’ve got make sense? 

Certain financial institutions offer credit cards under the motto: ‘Buy today, pay later’. Is this a debt trap? 

Offers like these are never free because you have to pay interest on late payments. So you should think carefully about the impact that such offers have on your consumer habits. From a psychological perspective, it’s important to organise your environment in such a way that you make positive decisions. For some people, this could mean consciously dispensing with services like these because they know it makes them more susceptible to buying on impulse. 

We are heading towards a cashless world. How will this change society?  

People are very different, also in how they deal with money. Some find it more practical if they don’t have to use cash any more. A change in payment format won’t change their spending habits because they still only buy what they need. Others might be more easily tempted by cashless payments, so they’ll have to develop strategies to ensure that they still make good decisions. For example, they might set certain limits on their electronic payments.