Who Said Money Can’t Buy Happiness?

For years, the age-old question has been asked: can money buy happiness? From earning money to spending it, we all have different perspectives on how much value we give to money. One of the most common sayings we often hear is, “Money can’t buy happiness.” But is that really true? Let’s explore this concept together.

Can money buy happiness? This is a question that has been asked for decades. The answer, surprisingly, is both yes and no. Money can bring happiness, but it’s not a guarantee. For some people, having a comfortable lifestyle and financial stability can bring a sense of joy and contentment. 

On the other hand, others may feel that money doesn’t necessarily bring happiness, and they might prioritize other things in life that bring them joy.

According to some studies, one of the reasons people believe that money can’t buy happiness is because of the misconception that money is the only thing that matters in life. We often associate money with material possessions, and we tend to believe that having those possessions is the key to happiness.

However, most studies show that money can buy happiness! 

Money can bring happiness, but only if we use it wisely. Spending money on experiences like travelling or going out with friends and family can bring joy and create lasting memories. Research has shown that experiences are more likely to bring happiness than material possessions.

Furthermore, money can also provide a sense of security and stability, which can bring peace of mind and reduce stress. When we’re financially stable, we don’t have to worry about paying bills or making ends meet. This can lead to an overall feeling of contentment and satisfaction.

In 2010, Daniel Kahneman, a Nobel Prize-winning economist and psychologist, published in his study that “emotional well-being [also] rises with log income, but there is no further progress beyond an annual income of $75,000.”

However, in a much more recent study, researchers Daniel Kahneman and Matthew Killingsworth came to the conclusion that the threshold of $75,000 may actually not be enough for people to be content. 

According to Killingsworth, happiness does not plateau after $75,000 and can continue to rise with income well beyond $200,000.

The research, published in the Proceedings of the National Academy of Sciences, surveyed 33,391 adults in the United States who are employed and have a minimum household income of $10,000 per year. Participants were asked to report their emotions at random intervals throughout the day, using a smartphone app developed by Killingsworth called Track Your Happiness.

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The study found that, for the majority of people, happiness does indeed continue to rise with income even in the high range of incomes. However, about 20% of participants – an unhappy minority – experience negative “miseries” that cannot be alleviated by earning more money. 

For this group, suffering may diminish as their income rises to about $100,000 but not much beyond that.

Additionally, the study found that money can affect happiness differently, depending on income. Among lower earners, unhappy people benefit more from increased income than happier people do. “In other words, the bottom of the happiness distribution rises much faster than the top in that range of incomes,” the study said.

It’s important to note that the study had limitations, as substantial data was lacking for those earning over $500,000. The study’s authors also acknowledged that happiness is a changing daily scale for many people and that happy people are not all equally happy.

The researchers noted that money is not the only determinant of happiness and that many other factors play a role. While money may not be the secret to happiness, the study suggests that it can indeed help. 

man holding money
Photo by Shane on Unsplash

But, how much money do you need to be happy? 

This is a tricky question as there’s no one-size-fits-all answer. The amount of money that brings happiness varies from person to person. It depends on factors like location, lifestyle, and personal goals. 

However, studies have shown that after a certain point, the amount of money we make doesn’t have a significant impact on our happiness levels.

It is how we choose to use our money that makes the difference. Spending money on things that align with our values and bring us joy can increase our overall life satisfaction. Conversely, spending money on things that don’t bring us genuine happiness can leave us feeling unfulfilled and unsatisfied.

It’s essential to understand that money is just a tool, and how we use it determines whether it brings us joy or not. Spending money on experiences, creating memories, and investing in personal growth can all bring happiness.

It’s crucial to figure out what brings us joy and prioritize those things, whether it’s material possessions or experiences. 

As the famous quote goes, “Money can’t buy happiness, but it’s a lot easier to cry in a Mercedes than on a bicycle.”