‘Money can’t buy happiness’ is a phrase that most people are familiar with. I for one grew up with it being repeated to me every time an adult thought I was being too ambitious or too greedy. From my own experience however, my satisfaction with my life and my emotional wellbeing has improved significantly since I left university and started earning my own money. The increase in income meant I could now afford therapy, live in a safer neighborhood, have good health insurance and travel. But this is just my experience. In this post we will explore what the experts are saying about this highly debated topic: Can money really buy happiness?
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Money Can Buy Happiness Up To A Point
I came across a research done by Daniel Kahneman and Angus Deaton on high income and happiness. The conclusion of the research, based on more than 450k responses to a survey, found that up to a certain income threshold money can buy happiness. High income improves one’s elevation in life and up to a point one’s emotional wellbeing. That point is $75k annually. The research also supports the fact that low-income earners are more likely to be stressed and suffer from emotional pain than high-income earners (above $75k). So the answer to the question, can money buy happiness is yes it can up to a certain point. After $75k, progress is marginal and immaterial. While money can increase one’s satisfaction in life, over this threshold it has very little impact on happiness and one’s emotional wellbeing. On the other hand, lower income earners benefit greatly from an increase in money. Their stress levels decrease thus improving their emotional wellbeing.
Money Can Buy Happiness If It Fits Your Personality
The thought that money can buy happiness depending on how you spend it should not come as a surprise. I myself find that spending on experiences rather than products makes me happy. Research published in Psychological Science in 2016, based on more than 76k bank transaction records, correlates personality spending to happiness. The research analysis revealed persons who spend according to their personality experience higher levels of life satisfaction. As a result, personality matched consumption results in higher levels of happiness.
“Finding the right products to maintain and enhance one’s preferred lifestyle could turn out to be as important to well-being as finding the right job, the right neighborhood or even the right friends and partners.”
Thus, money can indeed buy happiness if it is spent right. The key here is spent right. Products that make one person happy may not bring any satisfaction to another. This response to the question can money buy happiness is very similar to the previous one above in that it’s not a one shoe fits all.
The Bottom Line
Happiness is very subjective and can be measured in many different ways. It is up to you to determine what that looks like to you. We can agree, however that achieving our goals on our journey to financial wellness is something that makes us happy. So, can money buy happiness? The answer is a conditional yes. As your income increases it is up to you to use that resource to create the life and social support that makes you happy.
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