Should Money Motivate You? 5 Things to Know

1.   Money is important

Money is important – there’s no doubt about that. But at some point, you’ll start wondering why it is so. And then you start analyzing the role it plays in your own life.

Our society has different viewpoints when it comes to why money is important. Perhaps the most common measure of its value is its ability to provide us with options on how we can live our lives. While it’s not everything, it can be a powerful tool in achieving our goals and making the best of our lives by giving us access to more experiences.

You can have a serving of pasta or get your hair done in exchange for a sum of money. If you want to learn how to speak French, you can hire someone to teach you. In essence, money can facilitate transactions so things can happen. In this case, it gives us the freedom to control our lives.

2.   Money is an extrinsic motivator

Is money a motivator? There is a widespread view that when money is used as a reward, people tend to get more interested. While this may seem true, studies have actually shown the opposite. In a meta-analysis that pooled the results of 128 controlled experiments, the conclusion highlighted the negative effects of incentives on intrinsic motivation.

The effects were particularly strong on enjoyable tasks. For every increase in reward (extrinsic motivation), the subjects’ intrinsic motivation (satisfaction) decreased by 25%. Also, when the participants found out in advance how much money they’d be receiving, their enthusiasm decreased by 36%.

These results suggest, as concluded in another study, that extrinsic rewards like money diminish intrinsic motivation instead of promoting it.

Still, in another experiment, it was observed that while the economy had been progressing steadily over the years, response levels regarding intrinsic motivation such as contentment and happiness had remained stable.

3.   Money represents your economic status

In most cultures, money is a symbol of economic status. Generally, someone who can afford to buy fancy cars, multiple houses, jewelry, or fine clothing is considered rich. While societies define wealth differently, there is one concept that’s common to these definitions, and that is the presence of enough financial resources.

On a positive note, having enough money can mean financial security. When you have sufficient funds to finance your daily needs, you’re spared from the trouble that comes with having to make ends meet. In this case, it serves as a safety net you can fall back on to survive day-to-day life.

4.   Money does not equate to quality and performance

Despite the notion that a higher salary means better performance, research shows such an idea is not necessarily true. Results of a study that had analyzed data from over 200,000 public sector employees revealed that the subjects’ engagement levels were three times more strongly related to intrinsic than extrinsic motivations. These two tend to cancel each other out, meaning that when employees have little interest in external rewards, they’re likely to enjoy working.

On the other hand, when employees are more interested in external rewards (such as money), they tend to miss the fun. The general idea suggested by the research is that the more people focus on their salaries, the less they can pay attention to the things that make them perform best, such as having fun or learning new skills. So, for a runner, it’s more motivating to go for a run because it’s fun and not to lose weight or get fit.

5.   Money means differently for different people

The idea of money has been around since humans walked the earth. For centuries, its representation has continuously evolved. Despite such changes, one thing about it has remained the same up to this day – its significance in everyday life.

While people value money because of its many uses, not everyone looks at it through the same lens. For some, it means power and security. For others, it implies respect.

Others simply regard it as a tool that facilitates transactions. While they consider it important, it’s not everything for them. In sum, people view money differently, and these varying perspectives are shaped by personal circumstances.

There’s no denying that money is beneficial in many ways. We need to pay our bills and provide for our families. However, research points out that there is a limit to the amount of money the human brain can handle. According to a widely cited study, emotional well-being levels improve as salary increases but only up to P1.5 million ($75,000). Beyond that, one’s happiness and contentment levels plateau.