Think Money Can’t Buy Happiness? Think Again

It all depends on how you spend it. Consider these ways that money can actually bring moments of delight and lasting satisfaction.

Once I saw a bumper sticker that read, “People who think money can’t buy happiness must not know where to shop.”

While I abhor the empty-headed entitlement of the statement, I have to say that its underpinnings are true. I’ve been broke and I’ve made a decent salary. Guess which is better?

In the strictest sense, money can buy happiness. Having enough cash means you don’t have to choose between heating and eating, or beg the landlord to give you another week to come up with the rest of the rent. When your car breaks down you can fix it; if your kid gets strep throat you can pay for the antibiotics.

Money can’t buy “a fixed amount of happiness,” said Harvard University’s Daniel Gilbert, in an interview on National Public Radio. But he also pointed out it’s ridiculous to believe that cash has nothing to do with contentment.

“All you have to do is go stand outside with no coat, no shoes, nowhere to go and hungry, and in about five minutes you go, ‘Wow, money would make me happier,'” said the psychology professor and author of “Stumbling On Happiness.”

“So money is obviously related to happiness, but its relationship is intricate and complex.”

You don’t necessarily need loads of lucre to be happy; in fact, there seems to be a point of diminishing returns. A Princeton University study from a few years back indicates the magic number is $75,000.

The lower a person’s annual income falls below that benchmark, the more unhappy the person feels. Yet no matter how much more than $75,000 people earn, they do not report greater feelings of happiness.

To be clear: The study is not saying that higher salaries won’t improve your life. Instead, it suggests that after $75,000 a person’s emotional equilibrium is more affected by factors such as “temperament and life circumstances.”

Rethinking how we spend

Recent studies also show that people get more bang for their buck by investing in memorable experiences rather than more stuff. The Wall Street Journal cites two researchers making this point in a recent article. However, many people get it backward, often cutting back on experiences instead of material goods when they are in a money-conscious mode. According to Ryan Howell, associate professor of psychology at San Francisco State University:

“People think that experiences are only going to provide temporary happiness, but they actually provide both more happiness and more lasting value.”

Experiences meet more of our psychological needs, according to the article:

They’re often shared with other people, giving us a greater sense of connection, and they form a bigger part of our sense of identity. If you’ve climbed in the Himalayas, that’s something you’ll always remember and talk about, long after all your favorite gadgets have gone to the landfill.

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  • Johnny

    On the sugject of: “Think Money Can’t Buy Happiness? Think Again.” Money makes it easier to pay for things. Other than that it has no real value. I have seen some people that came into a windfall – then – get greedy for more, but, there was no more. as far as their happiness went – It went down the preverbial tube. As for myself I am comfortable. Years ago I learned one of the secrets to success was multiple streams of income. That way if one should be desolved there are the others.

  • Katie Collins

    I agree with the studies that show money buys happiness to an extent. After that point of all needs being met, a few nice things in the house (I *think* it was in the neighborhood of $70k per year?), money doesn’t increase happiness. That makes sense to me.

  • Draftdog

    Money buys me time, no stress and most of all freedom. Retired, make much less money, but never been as happy. I don’t always have money, but when I do I spend it wisely. Stay free my friends.

  • RoInSD

    When I was a youngster we were poor. Dinner at times consisted of USDA surplus canned chicken which was awful. When I was old enough to earn a living, eating well was, and still is a priority. Now that my husband and I earn a good living, and we are older with some physical issues, years of being really frugal have allowed us to afford the luxury of hiring a gardener and house cleaner when we need assistance. Money does buy time – when I have a house cleaner I am freed up to work on other projects around the house while they tackle the cleaning I can no longer comfortably do. I make donations to charitable organizations a priority – I like to think I can help others. I will never forget how it felt to be so poor to eat awful food. If I can make another person’s life a bit more comfortable, that leaves me with a great feeling of satisfaction, even if I just bought that stranger a sweet smelling bar of soap or some shampoo.

  • Practical Parsimony

    No matter how little I have had, I have always found a way to give to others. It always made my step lighter afterwards. As for money buying happiness, I think it buys peace of mind. Peace of mind makes me happy. I have known one person who had a very comfortable life who begrudged the poor the food they got from food pantries, saying he thought he deserved free food. I could never explain to him that he ate well and when he did not eat well, that was his choice.

  • drackip

    Read Maslow’s Heirarchy of Needs Treatise – Studied in high school and college – I just reread it 40 years later and now that I have more than two dimes to rub together , it makes so much more sense . Once you reach your level of self actualization , more money becomes superfluous . I’m retired , make over 80k (which is more than I made when I was working) and use very little of it – I get more satisfaction helping out my kids and grandkids and charities than buying myself more “stuff” .

  • LagunaLady27

    Every other week I go out to lunch while my house is being cleaned. I know I earned these luxuries by working hard for almost fifty years. I am grateful that my hard work paid off for me. I know that for some people it has not.

  • Sally Schrock

    I live on a fixed income and sometimes money is tight. I am content, however, because I have a roof over my head and plenty of good food to eat. The only thing I’m lacking is a vehicle and so have to rely on public transit and my housemates to get around town. Having a good reliable vehicle would mean the world to me–and yes, in that regard, money would buy me happiness!

  • Georgia Wessling

    I am living on less than half what my husband and I were when we retired. However, I own my home (not great, but adequate) and my car. I have no debt (we spent years paying it off) and few needs. I am able to give often and regularly to some. I say thank you prayers constantly to God for His blessings. I would never have imagined being in this position. So, in that sense, money has brought me unexpected happiness.

  • Carlos Demattos

    My goal is to have my house paid off, get it covered in solar panels, dig a well for water and install a pump. I drive Geo Metros now to save on gas. It would be nice to not have to pay the mortgage, electricity and city water. Then the main expense would be food and hopefully we could grow a lot of our own. We rarely eat meat anyway, except fish. Maybe I could farm them in an old above ground pool. The one extravagance I would really like is a classic Corvette. I do have a cool, classic motorcycle however. It feels good to have a decent emergency fund. There is a good peace of mind there. My wife and I usually go to the $2.25 movie theater once a week for date night and get a big bucket of popcorn for another $4.00. I get joy from spending time with my wife, going to church, singing and praying, playing basketball and keeping up with my friends on facebook.

  • bigpinch

    By definition, happiness is loud farting. Money can’t buy loud farting but it can buy the beans.

  • bigpinch

    In 589 (BCE) Gautama the Buddha said, “Loud farting is happiness. Money cannot buy loud farting but it can buy the beans.” All meditate on this, in silence, until you achieve enlightenment.

  • Jack Mabry

    Use your money to pay off all your debt. The feeling of freedom is unbelievable.

  • Vince Ryder

    I find that young people (read: under 30) seem to be almost universally concerned with “stuff” they want to buy, even as they have the least money available for shopping of the age groups (young, middle aged, retired). It’s difficult for me to persuade them (generally) that they are chasing an illusion, for the most part. I’m happy that I have sufficient money to meet all needs, with a bit left over for wants. In that sense, money has bought me happiness. The ability to travel more (experiences) and give more money away would (with additional money) theoretically bring me more happiness, so I’m open to the idea of un-retiring (at age 50) to generate more income to have those experiences, but I’m in no hurry to do so.

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