3 Ways Money Increases Happiness

Image for blog post the 5 pillars of personal finance

This is a touchy subject for many people. For some reason when a person has the opinion that money can increase happiness that person is scorned. Though there are exceptions, it’s life so there always will be, money can indeed increase your happiness. That is, money can improve your emotional and physical wellbeing. Check out my post on studies done around this subject and tell me what you think. If you aren’t convinced by the end of this post tell me why. Here are 3 ways money increases your happiness:

You Are Able To Meet Your Basic Needs

Image of a house. Meeting your basic needs increases happiness

It goes without saying that those who have their basic needs met are happier than those who do not. Examples of basic needs include food, shelter from the elements and adequate clothing. You may be asking why having your basic needs met makes you happier? Well, because it frees your mind and time thus allowing you to focus on other things that make you happy. If you are constantly in survival mode, your focus will be on where your next meal is coming from or how to maintain ownership of your home rather than performing activities that you can enjoy.


You Are Able To Meet Your Social Needs

Image of friends laughing. Meeting social needs increases happiness.

Before I go any further, let me state clearly that regardless of income and wealth, the quality of your friendship will depend on the effort you put in it. Money does, however, become important in determining your ability to have the time and resources needed to invest in improving or maintaining quality relationships. Being social means making time and putting in effort to build relationships with others. Furthermore, you can only be in one place at a time, thus you will have to earn enough money to take the time needed to build and maintain strong relationships. Being social also requires engaging in fun activities together, which more often than not, can result in you actually spending money with/on the person. Therefore, to satisfy your social needs you have to take time away from earning and in some cases spend your hard-earned cash.


You Have More Leisure Time

Image of two ladies playing golf. Having more leisure time increases happiness.

Time is probably one of the most limited resources. Consequently, we are only promised a finite amount. Additionally, your happiness is determined largely on how you spend your time. Doing activities that you enjoy will make you happy, while doing activities that you do not enjoy will make you unhappy. The more money you make per hour the more time you may have to engage in activities that bring you joy. How does this work? Well, if you earn $60 per hour, then in a 40-hour week you’d make $2,400. You’ll have the weekend to garden, yoga, cycle or any other activity that you enjoy. On the other hand, if you make $30 per hour, you’d have to work 80 hours to make $2,400. Because you’re working more hours, you’re spending less time on activities that make you happy.  

The aim of this post is not to discourage or ridicule anyone based on their income/wealth but to give an objective opinion on a popular topic. That being said, happiness is very subjective; it’s 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.

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Published by Nicole

Certified Internal Auditor

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