Money CAN Buy You Happiness…

But Probably Not The Way That You’re Thinking

The old adage says simply that money cannot buy you happiness. For the most part, we’ve accepted this saying as gospel.

But what if this motto isn’t entirely accurate and we could actually learn from the complicated relationship that has exists between the two factors?

The concept of happiness is a complex one, borne of multiple aspects, yet research has been shown that money can in fact contribute to contentment – but it’s how you spend your money that makes the difference, rather than the amount of wealth you have. We’ve all had the experience of spending money on things that we think will make us happy, only to be disappointed later on when it turns out to be just more ‘stuff’. And now we know why.

There are better ways to part with your cash that will give you much more bang for your buck in the long run.

// That’ll Be $75K, Please //

Photo: Robert Andall

Money may not buy you happiness, but it isn’t exactly detrimental to your happiness either. After all, plenty of people would rather cry in a Tesla than on the bus, and it’s much easier to enjoy life when you’re not worried about how to pay your next bill.

So most people hustle to make as much money as possible in their careers, thinking that each pay rise will make them even happier than the last. And that concept might be true, but only up to a point. In 2010, researchers found that $75,000 seems to be the “magic number” when it came to contentment, but after that, relative happiness kind of tapered off. Even people who earned substantially more than $75,000 weren’t any happier in their daily lives. However, when it came to peoples concepts of their lives in general, a more recent study found there was no specific cutoff, and that more money could actually equate to more satisfaction.

The thing is, knowing where the cutoff point might be doesn’t actually help us understand which kind of spending could make us happy and which won’t, which is a pretty important factor. Where should we invest our wads for our best chances of happiness?

The obvious place to start looking is at things that we buy for ourselves, but this instinctive behaviour would be incorrect. We already spend quite a bit on ourselves (even beyond necessities such as rent or our mortgage, our food and our transport) and the problem is that the money you spend on yourself is completely unrelated to how happy you are with your life. As we said before, spending on yourself won’t make you unhappy, but it’s not going to significantly make a difference positively either.

But there are at least two ways (maybe three) to statistically improve your happiness. For one of them, Harvard professor Michael Norton has discovered that the more people spend on other people, the happier they are overall. The act of giving, rather than keeping, is associated with greater well-being, – whether that giving is in the form of donating to charity, buying gifts or treating a friend to lunch.

And apparently, people who spend their money on other people, in general, have happier days.

women standing in shopping cart
Photo: Robert Andall

// Experiences > Material Goods //

In the second instance of how to improve your happiness, you can still spend on yourself, but switch from “things” to something else.

There’s been a hell of a lot of research over the last decade pointing towards the concept that buying experiences far outweighs buying ‘stuff’ in terms of your happiness quotient. One of the main reasons for this is that when we purchase stuff for ourselves, we often end up by ourselves, with our stuff.

On the other hand, experiences are usually inherently social affairs, whether it involves going to dinner, to a concert or on a hike with people. And while people often hesitate to spend on experiences rather than objects because it seems like physical things last longer, actually, it’s our experiences with other human beings that ultimately impacts us on a deeper level and leaves the biggest positive influence on us.

A study from San Francisco State University discovered that even when people knew an experience would lead to greater happiness, they spent their money on material objects anyway (- which is kind of scary when you think about it. Have we been so deeply brainwashed by consumerism?!). Afterwards, participants regretted the decision and said they thought an experience would have been of better value after all.


So there you have it. If you want your money to make you happier, you either need to spend it on others or spend it on experiences. And hey, maybe you can even think about ways of combining the two – perhaps taking a friend to a show as a gift or by donating and volunteering your time to a charity you support.

You’ll soon see it starting to pay off.

By Fable & Matter

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