Can Money Buy Happiness?
We’ve all heard that money can’t buy happiness, but there is a study suggests it’s more linked to happiness than people think. According to a Princeton University study that looked at more than 1,000 people in the US and Canada, money can actually buy happiness, but not in the way you may think. [Sources: 3, 20]
What researchers discovered
After answering questions about whether money can “buy happiness,” the researchers compared the answers to respondents’ incomes. They discovered that contrary to popular belief that relationships and experiences are more important to happiness. The findings showed that it’s our own perception of how we perceive our own income, education, and occupation standing in comparison with others that impacts our happiness. A sort of, are we keeping up with the Joneses or are we were we are meant to be for our socio economic standing.
Time or Money
Additionally research conducted on 1,000 graduating students from The University of British Colombia, asked them whether they tended to value time over money. Whilst the small majority prioritized time, still 40% prioritized money.
They then went back a year later to those same students and discovered that the ones who prioritized money over time ended up less happy after graduation compared to the 60% who prioritized time.
So next time someone says, “Can’t money buy happiness?,” remember that they’re only half-right.
Money may not buy happiness in the conventional sense, but there are a lot of things we can do to with money to increase our happiness.
Let’s look at some of the ways you can spend your money now and which are the most likely to bring you happiness. The most effective way to use money to increase happiness is to spend it on others. [Sources: 2, 10]
Research suggests that people who can help others financially are more likely to be happier. Despite the old adage that money cannot buy happiness, new economists are gathering evidence that money can make people happier if you know the right way to use it. [Sources: 11, 23]
Cash & Happiness
If you have cash, you may be happier spending it on someone else, but it doesn’t guarantee happiness. Another way to make more luck out of money is to use it to pay off debt. If you are not already happy, money can bring you a temporary escape from your inner well-being. Wealth can also serve long-term health goals, where it’s total absence can cause misery. [Sources: 12, 15, 19, 23]
Happiness economists are interested not only in how money makes individuals happier, but also in how money can affect an entire country’s happiness. If you compare the number of people in a country with money to give and those who gave and spent, you see that rich people are actually much happier than poor people. This discovery has the potential to change the way we use money, the money we earn and spend, and possibly even make our lives happier overall. [Sources: 13, 23]
Money as a Facilitator
Of course, having money beyond the basics of food and shelter acts as a facilitator. With money, you can buy experiences or things that can in turn bring about happiness. For example, I have always loved Formula One. That’s not the cheapest of sports to try and follow, and I had a goal to travel the world one race at a time. My first race was the Belgium Grand Prix in Spa and I managed to go fairly cheaply, even though I had some pretty hot race day tickets. My second race I decided to do the Monaco Grand Prix. That meant a helicopter flight from Nice, a top hotel in the middle of Monte Carlo, dinner in the most exclusive restaurants and again of course the hottest race tickets available. That trip to Monaco was eye-wateringly expensive especially versus the trip to Spa. But which one do you think I remember the most with the fondest of memories. Which one do you think I reminisce about the most?
As expensive as that was, that trip brought me so much happiness and joy and memories that I would pay double to experience that again.
So you see if you want to buy happiness, you need to extract as many rewarding and prolonged experiences as possible from your purchases. There is no worse way to spend money from the perspective of happiness than to buy something that costs time, which is even more precious than money. If you have enough money in your bank account to buy your basic needs – food, shelter, and the like – you will be as happy as you will ever be. Some of the things you buy may bring you short-term happiness, but they will not lead to long-term, lasting happiness. [Sources: 4, 16, 21, 24]
More money equals more happiness seems a reasonable conclusion, but that is not all. While the old adage says money cannot buy happiness, several studies have found that you don’t have to be a billionaire to buy it. For example, research has shown that higher incomes are associated with higher life satisfaction, such as better health, better relationships, and better education.
Happiness is complex
The truth is there are many factors that contribute to a person’s happiness, besides money, and research has shown that social relationships and connections make important contributions to happiness; as well as money.
So next time someone tells you wealth cant buy you happiness tell them that’s only partially true.