3 Things Money Impacts Your Happiness – Does Money Buy Happiness?
- Sep 23, 2022
- 5 min read
Written by: Casimiro da Silva Santos, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
Money is often a motivator as a way to attract talent. At least it used to be for Generation X or Gen X or MTV generation, to which I proudly belong. We saw the end of the cold war, the rise of personal computing, and feeling lost between the two massive generations — Baby Boomers and Millennials.
For Gen Xs was, and I dare to say still is, common to work for money as we have the highest debt load of any generation. We've heard the saying "money can't buy happiness" quite often. And it turns out there's some truth in it—but only some. Even those who highlight the motivational effects of money accept that pay alone is insufficient.
Money can buy almost everything and satisfy every wish we might have, but does it buy happiness? Research says that the more money you have, you are less satisfied. So let's look at what money can buy you and why this is more important than we often realize.
The Effect of Money on Happiness Does Depend on How Much You Have.
When it comes to money and happiness, the effect of money on happiness does depend on how much you have. Studies show that the more you have, the less satisfied you feel—a phenomenon is known as hedonic adaptation (or hedonic treadmill).
"There are sufficient resources in the world for the needs of everybody, but not enough for the greed of even a significant minority." ― Millard Fuller
In one study published in Psychological Science, researchers asked people about their income, material possessions and overall life satisfaction. The participants were then followed over time to see if higher payments were associated with greater happiness or not. Researchers found that those who reported being financially well-off initially were happier than their poorer counterparts in the short run. However, they did not remain so over time. Those who grew accustomed to wealthier lifestyles eventually felt just as satisfied or dissatisfied with their lives as those who never achieved great wealth.
Money Can Buy Happiness as Long as It's Spent on Other People, Including Your Loved Ones.
So money can buy you happiness, as long as you spend it on other people, including your family, friends and loved ones. But be careful. There are limits to how much happiness this strategy can create. If you're spending all your money buying expensive gifts for your friends and family, then suddenly lose all of it, they might not be that happy to see that their new car or jewellery is now gone. If you want to make sure that your loved ones will still be happy with the gift after a sudden loss of wealth, consider getting them something more personal by creating something together or buying them something from their favourite store (or website).
Family is one of the essential things in life, and it can be hard to see them as often as you would like. Money means you have more flexibility regarding time away from work, so if your friends have a free weekend, you can visit them! If someone wants to plan a trip for their birthday but doesn't have enough money for it themselves, money can help them with a budget to afford the journey. Money allows families who don't live near each other to feel still connected. With modern technology such as FaceTime, Zoom, and WhatsApp, people feel closer than ever without necessarily having each other physically present - although technically, they're still not together! Alternatively, you can buy a plane ticket, a bus ticket or put yourself in a car to meet your family and loved ones.
Money Buys You Freedom From Stress.
In today's busy, super connected, always online World, work-life balance has become a priority in our lives. People are taking "me-time" more than ever. So, money buys you freedom from stress.
If today you're feeling stressed, money can buy you the time or resources to do the things that relax and calm you. Whether it's taking up yoga, learning how to garden, or a hobby that you long forgot, money can buy to help reduce stress levels and thus make you feel happier.
It's Hard to Feel Happy Without Basic Needs Met First.
You can't be happy if you're hungry or homeless. You can't feel happy if you're in pain, lonely, or sick. If your basics aren't met—food and shelter—then it's hard to feel happy in any other area of life.
As you might expect, the effect of money on happiness depends on many things, including these three:
How much money do you have? Studies have shown that people who earn $75,000 per year are generally happier than those who make less than $25,000. But if you make $150,000 or more each year (assuming you don't have to pay a ton in taxes), your level of happiness won't increase much further.
How do you spend it? Spending money on experiences—like travelling or going out with friends—has been shown to make us happier than spending it on material possessions like clothes and cars. So if your income allows for some big-ticket items but not others, focus on those experiences. They could improve your life long term.
How much does it cost? The price tag is essential when determining whether something will bring joy and happiness into our lives—and unfortunately, we're often unrealistic about what something costs relative to our budget before purchasing it! This is why so many people go into debt shopping (or worse yet). If this sounds familiar, try only making purchases that fit within what's available in your current budget; this way, there's no guesswork involved in deciding whether or not buying something will be worth its price tag later down the road.
ON A FINAL NOTE
So, does money buy happiness?
Well, not always.
It does affect your level of happiness and satisfaction in life, but that effect depends on a lot of factors. If you have enough to cover your basic needs, it's easy to see how more money can help you. However, studies show that once you reach that point—the magic number is about $75,000 a year—more money has little to no effect on your happiness (and may even decrease it). So while additional income may increase the amount of stuff you own or allow you to enjoy luxury items like vacations and designer clothes, it won't make you any happier than someone who earns slightly less.
The key takeaway is that money isn't everything. It isn’t an obstacle. It's just a vehicle for helping us achieve what we want out of life.
Casimiro da Silva Santos, Executive Contributor Brainz Magazine
Casimiro da Silva Santos, better known as Cas, uses pronouns he/his. He is a dad, a business and climate action leader, a coach, and a speaker. His mission is to create a perspective of abundance, alleviating scarcity so that we can live a brighter future. After a transformational coaching experience with Simon Sinek Inc., Cas decided to create Bring the Best®, a coaching and consulting firm for personal development and business growth. Through individual, career, and executive coaching, Bring the Best transforms lives so that each person can live the life they want and dream about. His coaching style is authentic and empathetic, with a special focus on the LGBTQIA+ community.
