Does Money Truly Bring Happiness?

We’ve all heard the phrase “money can’t buy happiness.”

However, we all spend money, and for the most part, it is a finite resource.

How many times have you willingly given up your leisure time in order to make more money?

You’re not the only one who feels this way.

However, new research reveals that putting money ahead of time may actually make us unhappy.

However, numerous studies have examined how cultural values, location, priorities, and spending habits influence happiness.

Some argue that wealth matters, but accumulating riches doesn’t guarantee happiness.

Continue reading to learn more about the study on the link between money and happiness.

What’s the Connection Between Money and Happiness?

According to a 2010 study by psychologist Daniel Kahneman and economist Angus Deaton, money does impact how people evaluate their lives.

People with more money feel better about their lives.

However, as expected, emotional well-being increased with income, but only up to a $75,000 yearly wage ($90,000 in today’s money).

People were also unsatisfied with increasing earnings.

While “poor income is connected with both low life evaluation and low emotional well-being,” the key study concluded that “rich income buys life satisfaction but not happiness.”

Matthew Killingsworth’s 2021 study found that well-being and life satisfaction improve with wealth, continuing beyond $80,000.

“Higher earnings may still have the potential to improve people’s day-to-day well-being, rather than having already reached a limit for many people in wealthy countries,” the researchers concluded.

He developed a program called ‘Track Your Happiness,’ an app that looks into what makes life worthwhile.

You contribute to Killingsworth’s experiment by telling the app how you feel throughout the month.

This helps you determine which elements link to higher happiness.

Read: Can Money Buy Class?

Changing Times to Money and Happiness

As research clearly shows, times have changed since 2010.

We now live in a world where a person’s criteria for happiness grow with their income.

You can’t buy happiness, but you can add intrinsic value by spending money on things that bring joy.

Things that make you happy are believed to be intrinsically valuable.

This means they’re important to you but not necessarily a conventional measure of happiness for others.

Extrinsic value is the opposite of intrinsic value.

This implies that people realize money’s real-world value and will take it (in general).

For example, you might enjoy traveling, while someone else prefers spending on the latest iPhone and MacBook.

In any case, money is being used to buy happiness indirectly.

So, as income increases, people can buy or do more things that bring them happiness.

Read: The Science of Happiness: How to Cultivate Joy and Improve Your Health

Ways to Spend Money to Increase Happiness

Spend on experiences, not things

A study found that people are happier when spending on experiences like travel, concerts, or special meals.

Nonetheless, material goods are tempting because they’re easy to compare, but they’re often unsatisfactory.

For example, someone may be content with their iPhone 7 until noticing friends have iPhone 11 or newer models.

The difference between an iPhone 7 and iPhone 11 is very clear when comparing both phones.

The once content iPhone 7 users now find themselves unsatisfied and want a newer version of the iPhone.

Here’s where the money-happiness correlation comes in.

If they can afford an upgrade, they feel happy—until the next version is released.

In contrast, if they do not have the money, they are stuck in their satisfaction and begin to feel unhappy

Experiences, on the other hand, are more difficult to compare.

For someone who would rather attend a concert than travel abroad, attending a $50 concert would bring them more happiness and satisfaction than going on a $1000 trip to France.

Read: What Does it Mean to be Financially Free?

Spend money on others

Perform the following experiment on yourself.

Today, take a bit of spare change and use it to help someone else.

You may send a little present to a friend, assist a stranger at the supermarket who is short on funds, or donate to an important cause.

Although spending extra money on yourself may be tempting, a decade of research suggests that spending it on others is more likely to make you happy.

Even those who are suffering to satisfy their basic requirements might feel the “warm glow” that comes from helping others.

However, this does not always imply that giving makes everyone happy.

It’s more important to consider how and why you offer.

It’s critical that you feel free to donate — that it’s something you want to do rather than something you’re compelled to do.

Look for giving opportunities that will allow you to see how your generosity is helping a person or cause that you care about.

You can also start small.

According to research, paying someone’s bus fare, buying a snack for a homeless person, or even giving a bit of cash can improve your attitude.

Read: Major Reasons Financial Issues Can Cause Divorce

Bottomline

Ultimately, depending on how you spend your money, you can boost your potential for life fulfilment.

You will be happier if you spend money on experiences or goods that match your values.

The amount of money required to be content varies.

Happiness may be determined by how much money is required to meet your basic necessities and what personally provides you delight.

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