Money can't buy happiness. Just how many times have you heard that in your life? This old saying reflects the generally accepted belief that happiness is a mindset that cannot be changed by how much – or how little – money we have. But, sometimes, we may feel that that's not completely accurate and 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.
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In fact, the link between mental health and financial problems is well documented. So, if that’s the case, why can’t money buy happiness? Let’s take a look at research findings surrounding this long-standing debate, and uncover the connection between money and happiness.
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.
Take note: money can't buy happiness (but it can buy great Hawaiian shirts!)
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?
According to Nobel Prize winner and economist Angus Deaton, the benchmark 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.
“The link between mental health and financial problems is well documented, so if that’s the case, why can't money buy happiness?”
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.
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. 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.
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In fact, some studies suggest that making more than $95,000 a year is actually linked to lower life satisfaction. This may be the case because as people earn more money, they develop more materialistic goals and then try 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).
Money won't buy happiness if you're stressed. © Lyashenko Egor/shutterstock.com
Furthermore, often money can’t buy happiness because earning more of it often equates with greater job responsibilities and a lower work-life balance. This can mean working longer hours, having larger responsibilities, and more time in the office – all resulting in less quality time with family and friends.
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.
Having more money than we need won't necessarily make us happier, but if we use it to do and experience meaningful things it might. Indeed, science shows that happiness is not about how much money you have, but about how you use 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.
Here are three suggestions on when spending money can boost your well-being:
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.
However, you don't need to be a billionaire to experience this: you can carry outs act of kindness that involve small amounts of cash every day, for example, buying a coffee for the person behind you in the queue, setting up a monthly direct debit to your preferred charity, or sponsoring a friend that is raising money for charity.
Likewise, being altruistic generally is a great thing for you: the benefits of kindness are huge and proven.
Material possessions still have a high place in many cultures and societies. But ‘stuff’ gets broken, lost or loses it appeal after time. Experiences on the other hand create memories that will always stay with you.
Take off: money spent on experiences, such as travel, raises happiness
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. In fact, it’s proven that a non-materialistic approach to life is one step to boosting happiness levels.
Use money to buy yourself extra time. This way, you'll have more time to do things that make you happy. 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 for more enjoyable things. 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.
RELATED Spending money: how to buy yourself a happier life
And you don’t have to be wealthy to benefit from any of these suggestions. A study of 6,000 people in several countries showed that those who spent money on time-saving tasks reported higher life satisfaction, regardless of their income bracket. The takeaway message is that spending money on things we enjoy contributes to our happiness, but also spending it to avoid things we dislike also works.
The last thing to consider when examining the connection between well-being and income 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, according to a study, wealthy people tend to associate happiness with pride, a sense of achievement, and feeling accomplished. 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 meant 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.
To sum 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 flash your cash in very specific ways. Happy spending! ●
Main image: Dean Drobot/shutterstock.com
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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.
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