Money CAN Buy Happiness | Here’s How
Economics Nobel Prize winers Daniel Kahneman and Angus Deaton claimed in 2010 that income above 75,000 (in todays money 108,000), did not correlate with more happiness. But, in 2021, Professor Matthew killingsworth published a paper with 1.7 million samples, in which he stated that individuals with larger incomes were happier, and no plateau was noticed. So…Which is it? DOES money buy happiness? Is there a cap to how much happiness money can bring you, and what type of happiness does it actually bring? Well, there was actually a collaborative paper done between both parties that we’ll go over at the end of the video. For now, let’s dive into the misconceptions of money and happiness.
The Misconception of Money and Happiness
The biggest challenge most people face when considering the relationship between money and happiness is the simplistic thinking: either money brings happiness, or it doesn’t. This black-and-white mindset can lead to two equally problematic paths. On one hand, you might find yourself chasing financial success at the expense of your personal well-being, believing that more money will solve all your problems. On the other, you might reject financial ambition altogether, convinced that money is the root of all evil, thus missing out on the comforts and security it can provide. Here comes the idea of bridging mindset. Envision a bridge. You want to stand as close to the center as possible when you feel yourself overcome with one specific vice. Now, again, ive mentioned that if you are in route to a achieve a goal, you’ll sacrifice part of one side of the bridge as you achieve your goals. If you want to be happy, you may need a certain amount of money, which places you closer to one edge. The trick here is to not sit on the edge of the bridge your whole life.
But here's the truth: the relationship between money and happiness is more like a complex dance than a simple equation. Yes, money can buy happiness—but it depends on how you use it. If you’re spending your money on things that don’t align with your values or bring you lasting joy, then no amount of wealth will ever be enough to make you happy. Now, if you learn to use money as a tool to enhance your life and the lives of those around you, it can absolutely contribute to your overall happiness. You need to really look inwards here. We all have toxic traits. money isn't gonna help you stop being as a-hole. its not going to fix your relationship with your family. its not gonna make you skinny or muscular. It wont get you the girl of your dreams. Sure, maybe its a catalyst for these accomplishments because it gives you the opportunity to actually work on those deficiencies, but that is why its important to LEVERAGE the money, and not expect yourself to simply change without work.
How to Spend Money for Maximum Happiness
The collaborative paper between Kahneman and killingsworth reconciled a lot of the differences. Both authors re-examined the data and concluded that money IS ASSOCIATED with more happiness. Of course, this doesnt apply to everyone. 80% of people will continue to be happier past 75k. However, there is a minority that does not see increased happiness past 100k, which is the same as 75k due to inflation. As killingsworth said, if you’re rich and miserable, money wont help.
In what ways can money increase happiness? Well, if you’ve ever lived paycheck to paycheck, that may be one of the dumbest questions to ask. Money gives you the luxury of not worrying about your next month’s bills. It’s a stress that is essentially non-existent. Money provides you with the comfort of not stressing over gas, groceries, unexpected repairs, etc.
You also get the luxury of having choices. You can pick where you want to live, what type of diet to eat, what car to drive, etc. These options give you not just financial liberty, but also a positive reward feeling in your brain. You feel happier because you have what you want. Your attachments to new objects may not lost forever, its true, but it does matter. Example, the computer i built was stupid expensive. And every day that i look at it, wow. when i render videos or play video games i appreciate that build. There are things that bring happiness past the “im bored of it” sure that doesnt always apply but its an example of when it does.
Try and spend money on experiences as well. Some people derive more lasting joy from experiences than from material possessions. The happiness you get from buying a new gadget or piece of clothing could fade over time, but the memories of a trip, concert, or special dinner can provide joy for years to come. So, instead of splurging on the latest iPhone, consider investing in a weekend getaway with loved ones. The experience will not only enrich your life but also strengthen your relationships, which are a key factor in long-term happiness.
Another way money can buy happiness is through generosity. Spending money on others—whether it’s gifts for loved ones, donations to charity, or even picking up the tab for a friend—can boost your happiness levels. When you help others, you not only improve their lives but also experience a sense of fulfillment and purpose that money alone can’t provide. So try it out. Give to charity, volunteer at locations, write a large check. Take note of how you feel, or of the people’s expressions when they see your helping hand. It could be the change you need.
One of the most overlooked ways that money can buy happiness is by purchasing time. This might mean hiring help for chores you dislike, so you can spend more time doing what you love, or even taking a job that pays less but offers better work-life balance. Time is our most precious resource, and using money to free up more of it for meaningful activities can significantly enhance your happiness.
Lastly, spend on your mental health. Invest in a therapist, psychologist, gym membership, etc. Anything that helps your mental clarity can greatly enhance your happiness. There’s tips and tricks we can all use to help us become better people. Listening to professionals greatly improves these odds.
Finding Happiness Beyond the Price Tag
So, does money buy happiness? The answer is a resounding "yes"—but only when used wisely. By spending money on experiences, investing in others, and buying time, you can transform your financial resources into a source of lasting joy and fulfillment. The key is to remember that money is a tool, not a goal in itself. When you align your spending with your values and priorities, you unlock the true potential of your wealth—not just in dollars, but in happiness.
The next time you’re about to make a purchase, ask yourself: Will this bring me lasting happiness, or am I just chasing a fleeting pleasure? By shifting your focus from accumulating things to creating meaningful experiences and connections, you’ll find that money, when spent wisely, can indeed buy a richer, more satisfying life. And that’s a kind of wealth that can’t be measured by any bank balance.
