Can Money Buy Happiness?

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Miguel Restrepo, Chief Copy Editor

We’re all familiar with the “money can’t buy happiness” phrase, but up to what point is this entirely true? For many people, the pursuit of happiness and the pursuit of money is essentially the same thing. Money can buy a certain degree of life satisfaction, whether spent on experiences or buying material items. Nevertheless, this form of satisfaction is just a temporary moment of happiness. This results in the question, can money really buy happiness? It seems easy to answer with a simple yes or no answer at first sight, but the relationship between money and happiness is more complex than you can possibly imagine. Money can make someone happier but only up to a certain point. 

The correlation between money and happiness is something that has been looked into for the past 20 years. Many factors come into play when researching if money buys happiness, such as cultural values, location, personality, priorities, and how you spend your money. Studies like the one published by the Centers for Disease Control and Prevention have concluded that adults living below the poverty level were three to four times more likely to have depression than adults living at or above the poverty level. Happiness may depend on how much money is required to cover your own basic needs and what personally brings you joy. Some people may even argue that “the number of money matters,” and that you may not feel additional happiness after reaching a certain amount of wealth. A study conducted in the Center for Health and Well-Being at Princeton University in 2010 by the economics Nobel prize winners Faniel Kahneman and Angus Deaton concluded that money does make us happier, but only up to a certain point. The study looked at surveys of 450,000 Americans and found that participants with higher incomes reported higher emotional well-being, up to an annual income of $75,000. After that, it drops off. Professionals like Lindsay Bryan-Podvin, a financial therapist and author of “The Financial Anxiety Solution” say an annual income of $75,000 may not be the threshold for everyone. 

There must be some connection between money and happiness, especially because having enough money to cover your needs keeps you relaxed and makes you live more comfortably. Nevertheless, recent studies suggest wealth alone doesn’t guarantee a good and happy life. What matters a lot more than a big income is how people spend it. Spending money on experiences or items that align with your values can increase your potential for happiness, and it’s been theorized that this is more effective than buying material objects. A 2014 review by a psychology professor at Cornell University, Thomas Gilovich, found that experiences make people happier because they enhance social relationships, are a bigger part of one’s identity, and are less likely to be compared to other people’s experiences. In other words, doing things can bring us more joy than having things. Our preoccupation with stuff obscures an important truth: things that don’t last create the most lasting happiness. “One reason may be that experiences tend to blossom as you recall them, not diminish… in your memory, you’re free to embellish and elaborate,” Gilovich said.

Sometimes, human ambition takes over, making us want more and more money. The more money you make, the more you want. Like psychology professor, Catherine Sanderson said, “The new science of happiness starts with a simple insight: we’re never satisfied. We always think if we just had a little bit more money, we’d be happier”. It’s an apparent paradox that has long bedeviled economists; the more you have, the less effective it is at bringing you joy. “Once you get basic human needs met, a lot more money doesn’t make a lot more happiness,” Dan Gilbert, a psychology professor at Harvard University, said. People overestimate how much pleasure they’ll get from having more. 

It’s important to keep in mind that happiness also comes from many other life factors that could probably be more important than money. This includes social life, experiences, family, and even relationships, but this doesn’t mean that money can’t buy at least a certain degree of happiness. The question as to whether money can buy happiness is something strongly divided by each person’s personality, priorities, and cultural values. However, money can achieve a degree of happiness if spent and managed correctly.