Money Can’t Buy Happiness (Except In These 3 Ways)

Do you believe money doesn't buy happiness? Well, think again. Research suggests that more cash can improve well-being, but as Dee Marques finds out, it’s how you spend money that affects well-being. Read on to discover the 3 ways you can use money to buy happiness. 

 

'Money can't buy happiness'. Just how many times have you heard that in your life? This saying reflects the generally accepted belief that happiness is a mindset that cannot be changed by how much—or how little—cash we have. But, sometimes—especially when going through financial difficulties—we may have felt feel that money and happiness are connected in some way. 

Indeed, at some point or another, we've all thought that we'd be better off with some extra cash in our pocket. When money’s tight, it's only natural to think that having a little more of it would make us feel better, less stressed about the future, and happier overall. 

Indeed, the link between mental health issues such as depression and anxiety and financial problems is well documented. “Studies have shown for decades that financial concerns are one of the leading causes of stress in our country,” says Ashley Agnew, director of financial wellness at Centerpoint Advisors in Massachusetts, USA. 

I've certainly had many sleepless nights worrying about how I'm going to handle incoming bills, growing debts, and securing an income as I grow older. These money worries have often lead to insomnia, poor sleep quality, and a deterioration in mental health. I'm sure this is something you can also probably relate too.
Take note: money can't buy happiness (but it can buy cool shirts)

So, if lack of cash can cause mental health problems, then why can't money buy happiness for us? Let’s take a mode detailed look at the research surrounding this long-standing debate.

 

Can Money Buy Happiness? Here's What Science Says

According to a report by The Psychological Society, money problems rank eighth in a list of the top 18 most common causes of stress in the United Kingdom. Similar findings have been reported in many other countries, including the United States, Australia, and Hong Kong. 

On the other hand, financial well-being is one of the main factors contributing to quality of life and overall happiness, so the concept of 'financial wellness' is definitely important when looking at why money can or can’t buy happiness. 

Financial wellness is defined as having enough money so that we don't have to worry about it or let it interfere with our relationships, health, and future plans. So, it would seem that the answer to ‘can money buy happiness?’ is yes—at some level—as long as you have enough of it. But how much is enough, and can financial wellness be quantified? 

 

“The link between financial problems and poor mental health is well documented. So, if that’s the case, why can't money buy happiness?”

According to Nobel Prize winner and economist Angus Deaton, the benchmark—within the USA—can be established at $75,000 per year. In his research, Deaton found that below that amount, stress and negative emotions were reported more frequently.

Of course, due to varying incomes around the world, that's not a fixed global figure, as it seems to vary from country to country. For example, studies have found that the amount needed for happiness was set much higher in Australia and New Zealand, but significantly lower in Latin America. 

 

Money Can't Buy Happiness: a Matter of Priorities 

Although the exact ‘price of happiness’ varies, most studies trying to answer the question ‘can money buy happiness?’ agree on one thing: once our basic needs are meet, the positive effects of money become less important when weighed against the negative aspects. 

RELATED: The 3 Things That Make People Happy During Economic Hardship

Of course, having enough money can reduce financial anxiety, but researchers have also found that people don't feel happier once they earn over the threshold figure discussed. 

In fact, researchers from Purdue University and the University of Virginia suggest that—in the US—making more than $95,000 a year is actually linked to lower life satisfaction. The authors suggest this is because as people earn more money, they develop more materialistic goals and then feel the need to keep up with appearances—and that of their colleagues/friends. Maintaining this costly lifestyle makes it easier to fall into a spiral of dissatisfaction (known as the hedonic treadmill). 


A job promotion may mean a raise, but also more stress

Furthermore, often money can’t buy happiness because earning more cash often equates with greater job responsibilities and therefore a reduced work-life balance. Indeed, bagging that promotion and connected salary increase could result in you working longer hours, having larger, more stressful responsibilities, and being chained to your desk for longer—all resulting in less quality time with family and friends (which is one of the essential 10 keys to happiness).

So, the important thing here we can learn here is to be aware of the fine line between having enough and overconsumption, which can never be satisfied, and eventually will make us unhappy. 

 

The 3 Ways in Which Money Can Buy Happiness

So, all the science points to the idea that having more money than we need won't necessarily make us happier. However, research also shows that if we use money on experiences and meaningful things it can boost our well-being. Indeed, science shows that when it comes to money and happiness, is not about how much money you have, but about how you spend it. 

An important part of finding balance between money and happiness entails using cash in a way that provides lasting satisfaction. For example, going on a shopping spree will only offer short-lived excitement, but investing in experiences can create the kind of memories—and joy—that last for ever. 

So, here are the three ways in which money can buy happiness: 

 

1. Being Altruistic

Studies show a strong connection between altruism and happiness. Some of the world's wealthiest people, like Bill Gates and Warren Buffett, donate most of their wealth, because that action helps them to find meaning in life.

Being altruistic with money is a win-win situation

However, you don't need to be a tech billionaire to experience this: you can carry out small acts of kindness that involve minimal amounts of money, for example, giving some small change to a homeless person, setting up a monthly direct debit to your preferred charity, or sponsoring a friend that's raising cash for a good cause. 

RELATED: Random Acts of Kindness: 22 Ways to Spread Happiness

Being altruistic in this way boosts your well-being, and the benefits of kindness are many and proven. 

 

2. Buying Yourself Time

Time is one thing I'm sure we'd all agree we would love more of. There just never seems to be enough time in a day to get things done; work, admin, home cleaning, family/child care, going to the gym/pool, etc. 

Money can buy happiness if you are using it to buy yourself extra time, enabling you to have more time to do things that really make you happy.

So, if household chores take up too much of your time and if you can afford it, hire a cleaner. If doing your taxes or managing your company's finances takes you hours, let an accountant do it and free up your schedule. If you and your partner are always exhausted because of your children, spending a little on a babysitter once a week can buy you precious time to yourselves.

 

“Money can buy happiness if you are using it to buy yourself extra time, enabling you to have more time to do things that really make you happy.”

And you don’t have to be wealthy to benefit from any of these suggestions. A University of British Columbia, Canada, study of 6,000 people in the US, Canada and Netherlands showed that those who spent money on time-saving tasks reported higher life satisfaction, regardless of their income bracket.

RELATED Spending Money: How to Buy Yourself a Happier Life

The research, published in the journal, Proceedings of the National Academy of Sciences, showed that individuals reported greater happiness if they used $40 to save time—such as by paying for chores to be done—rather than spending the money on material goods.

“In a series of surveys we find that people who spend money to buy themselves more free time are happier–that is they have higher life satisfaction,” said Dr Elizabeth Dunn, a psychologist professor at the University of British Columbia.

 

3. Investing in Experiences

Material possessions still have a high place in many cultures, especially in Western society. But ‘stuff’ gets broken, lost or loses it appeal after time. In fact, it’s proven that a non-materialistic approach to life is one step to boosting happiness levels. On the other hand, experiences create memories that will always stay with you. 

You can travel, take a cooking course, find a hobby you're passionate about, or simply be a tourist in your own town. Whatever brings joy to your heart, do it.

Spending money on experiences can buy happiness because we can also connect it to our passion. For example, if you're into music, treating yourself and a pal to go watch your favorite artist in concert. Furthermore, new experiences can often open our mind, introduce us to new perspectives, and offer up the chance to experience awe—another happiness builder.  

Take off: money spent on experiences, such as travel, boosts well-being 

 

Happiness and Money: Wealth Affects Our Perception

The last thing to consider when examining why money can or can't buy happiness is that happiness means different things to different people, so it's important to think about what makes you happy. 

 

Studies show that happiness is a complex emotion that can be experienced as a result of other positive feelings. For example, a 2018 study from the University of California and published in the journal Emotion, wealthy people tend to associate happiness with pride, a sense of achievement, and feeling accomplished. “People who make more money were more likely to experience happiness derived from their own accomplishments,” said lead author Paul Piff.

Conversely, less well-off people are more likely to experience happiness in connection with emotions like compassion and love. 

 

“Often money can’t buy happiness because earning more of it often equates with greater job responsibilities and a lower work-life balance.”

So, whatever happiness means to you, don't be afraid of making changes to find it, even if they seem scary at first. To some people, finding happiness could mean quitting high-paying corporate jobs to follow their calling. To others, it may mean taking up a less demanding job or arranging to work from home a few days per week, even if that means earning less. 

 

The Takeaway: Money Can't Buy Happiness

Summing up it seems clear that there's a connection between money and happiness and between happiness and income, but it's not always a cause-effect situation. Although money matters, it’s far from being the only factor contributing to happiness. 

Indeed, when trying to answer the question ‘why can't money buy happiness?’, it’s useful to rethink our perception of well-being, avoiding comparisons with others, and trying to find out what happiness means to us at an individual level. 

Moreover, in our pursuit of happiness, it makes sense to focus on meeting our needs and creating a vault of experiences and memories, rather than a life full of material possessions, without forgetting to be appreciative and grateful for what we already have.

So, it's clear that money can't buy happiness, except when you spend your cash in the specific ways of altruism, buying time, and experiences. Happy spending! ●
Images: shutterstock with Muh.Imron, Shakirov Albert, Alex From the Rock and unsplash

 

 

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Written by Dee Marques

A social sciences graduate with a keen interest in languages, communication, and personal development strategies. Dee loves exercising, being out in nature, and discovering warm and sunny places where she can escape the winter.