Can money buy happiness? It’s not a simple question to answer. Despite that, it’s something that gets the attention of many, so let’s get into it.
Think about your childhood. You probably have some favorite memories where you were very happy. What were you doing?
For me it’s that feeling of playing outside, running through the water sprinkler, having fun, and knowing you didn’t have to go to school for a couple of weeks. Total freedom!
Happiness is something every single one of us strives for. Feeling fulfilled, at peace, and connected. It can be as simple as being a Mexican fisherman and just having enough, but being very happy.
Earlier we talked about how much money you need to be happy, according to science. Today we’ll be looking in more detail if money can buy you happiness and what research says about that.
Deciding Factors – Can Money Buy Happiness?
There are a ton of studies done on the relationship between money and happiness. There are many different things that influence the relationship between the two.
Things that bring you happiness are hard to quantify into money. When you think about a warm summer afternoon with your friends or a lovely day with your partner, it’s hard to express that in terms of money.
Factors that determine whether money buys you happiness:
- Standard of living
- What matters to you
- How you spend your money
Money Will Buy Happiness When It Fills Basic Needs
When you earn less money than you need to fill your basic needs, you may be unhappy. The moment you earn more money and it is used to fulfill basic needs, your happiness will increase.
While it is great to say money doesn’t buy happiness, it absolutely does when primary needs are not met.
Imagine you can finally afford health care, buy nutritious foods, and live in a home big enough for your entire family. That will decrease your stress levels significantly and thus increase happiness.
Does How You Spend Your Money Affect Happiness?
Here comes the interesting part!
So, there are research results that suggest that how you spend your money actually matters.
When you buy experiences rather than things, you will experience greater happiness. Plus, when you are giving to others with absolutely no external reward, you will experience more happiness.
Two studies are done. In the first study, over 600 US citizens were questioned about their happiness levels. People who spent money on others were happier than people who did not. Also, people with lower incomes, who spent more money on others, were significantly happier than those who did not.
Another study gave students a cash envelope that they either had to spend on themselves or on someone else. The students expected to experience greater happiness when they spent the money on themselves. However, the study found that spending money on others made the students happier than spending money on themselves.
That means you can take someone out for dinner instead of buying a new TV, and you can get someone a surprise gift rather than buying new shoes.
So, Can Money Buy Happiness?
Simply put: money can make you happier than you currently are. You can buy things and experiences that make you happier, even if it’s just for a short while. When we make money, we contribute something to the world, which will also contribute to our feeling of happiness.
However, things are not just that simple.
There are thousands of people who are making a LOT of money and feeling terrible. There are also thousands of people who have very little money and feel happy.
Money amplifies happiness. This means that money can make you happier than you currently are, but it is not the magic thing that will make you happy with a flick of a switch.
Happiness is a very personal experience.
If you are not finding joy in your life now, money will only provide for a distraction in the short term.
For me personally, the more money I made the happier I got. This has little to do with money and everything to do with the fact that I am doing what I’m good at. I’m good at something, people want to pay me money for doing it, my happiness levels improve.
For others, money has enabled them to buy time, which means you can do more of the things you love, which in turn can bring you happiness.
So, how money can make you happy is in the following ways:
- Less stress and worry
- Feeling of freedom
- The opportunity to give to others
- Taking control over your life & your time
How To Get Happiness From Money?
If you’re thinking about a quick happiness boost, we have covered what you can do. Seek out the company of others in an experience or giving to others is a good start.
You can take your friend for lunch and have a great long talk. You can go to the beach and enjoy a sunset. Or you could go to a concert of your favorite band.
That is a state where you are experiencing a happiness boost. You can maximize this by searching for happiness boosts daily. Do the things you love!
When you’re looking for long-term happiness instead of these short-term happiness boosts, this is more focused on fulfilling your needs.
According to Tony Robbins, each and every person has 6 types of needs:
Most people have two that are dominant. When you fulfill your dominant needs, you feel happier and more content with life.
For me, growth and contribution are the most important. When I feel I am stagnant and don’t contribute to something bigger, I get unhappy. That’s why my day job didn’t fulfill my anymore and I decided to start Radical FIRE, where I share my passion for personal finances.
What is all comes down to is this: a happy life means having more fun, having more meaning, and seeing your bigger purpose (or contribution, or passion, what word resonates most with you).
We all die one day, the goal is to have fun and live a long & happy life.
Other Ways To Increase Happiness
My long term happiness has very little to do with money and very much to do with what money can provide me with – like freedom and time to contribute.
When you’re wanting to increase your happiness further, consider one of these:
- Start a gratitude journal – stating what you’re grateful for can help give you more positive thoughts throughout the day.
- Meditate – focus for 10-15 minutes just on you, without any distractions. This could be part of your morning routine.
- Get your habits in check – how we feel often depends on the habits we have. The more you have the habits in check, the more you’re working towards your (financial) goals.
All In All – Can Money Buy Happiness
Money may not directly buy happiness, but it can help you to reach a certain baseline of happiness. Purchase experiences that will leave you fulfilled & give to others.
Don’t only focus on the financial things that can give you happiness. Doing things like spending time with people you love or thinking about what is important in your life, is great too!
I am convinced that the majority of people can escape their paycheck to paycheck lifestyle and use the money to live happier lives at the end of the day.
What do you think, can money buy happiness?
Founder of Spark Nomad, Radical FIRE, Journalist
- Expertise: Personal finance and travel content
- Education: Bachelor of Economics at Radboud University, Master in Finance at Radboud University, Minor in Economics at Chapman University.
- Over 200 articles, essays, and short stories published across the web.
Experience: Marjolein Dilven is a journalist and founder of Spark Nomad, a travel platform, and Radical FIRE, a personal finance platform. Marjolein has a finance and economics background with a master’s in Finance. She has quit her job to travel the world, documenting her travels on Spark Nomad to help people plan their travels. Marjolein Dilven has written for publications like MSN, Associated Press, CNBC, Town News syndicate, and more.