Can Money Buy Happiness?

Last updated on May 5th, 2017

We’re really asking the wrong question.

Because the answer is, yes, of course money can buy happiness.

Money can get you out of debt, into a nice home, and on your dream vacation. It can change your status, improve your social life, transform your appearance. Money can buy you freedom from the job you hate and change almost any undesirable situation. So to say money can’t buy happiness is silly.

But of you course you also know that money makes people miserable and that once you have a certain amount of money you won’t notice an improved level of happiness beyond that point. Love, acceptance, and accomplishments certainly make people happy, and they are impossible to purchase.

So what do we make of it all? Should we continue to pursue wealth as our answer to health and happiness? Or should we look elsewhere?

We can start by asking a few meaningful questions.

can money buy happiness

First of all, what is happiness?

Happiness is complicated, and it depends on many individual preferences. But ultimately, it comes down to fulfillment of basic needs, purpose in a career, gratitude, human interaction, and generosity.

There are two forms of happiness. One is being happy about the status of your life and the other is being happy in the moment. So before you go asking such a generalize question as, “can money buy happiness” you must first define what kind of happiness you’re searching for.

It’s important to have both long and short term happiness, and the way that you spend your money cultivates either one or the other.

How are my money habits standing in the way of my happiness?

It’s simple. You take stuff for granted. There is someone in the world who would love to have what you have, and at one point, that person was you. That was before you purchased the items that you now take for granted.

Let’s go with the example of shoes. Pretend you love shoes. Or sunglasses. Or watches. Or iTunes albums. Or whatever. Pick something you love and consume frequently. I’m choosing shoes.

Buying a new pair of shoes every once in a while is fine and it’s fun. It’s good to have moments of instantaneous happiness, as this will make for a fun day. However, buying a pair of shoes every week will do two things.

First, it will compound over time. This instant gratification of spending goes from boosting your mood to destroying your long term financial goals. Not even necessarily that a pair of shoes each week would break the bank, but rather, adapting this concept into one area of your life makes it much easier to adapt to other areas as well. Being entitled to constantly consume and “treat yourself” on a regular basis is not the recipe for financial success.

Secondly, you’ll get used to having brand new shoes, and the level of happiness it once brought you will wither away. You’ll simply get tired of them and they will cease to give you the pleasure of the initial purchase. When this happens, you turn to the next greatest thing. Slowly, your life gets rolled up into a massive snowball of accumulation.

In psychology this concept is called the hedonic treadmill, which is the idea that regardless of a good or bad change, humans have the tendency to revert to a baseline level of happiness. Martin Seligman, the author of Authentic Happiness explains it this way,

“Another barrier to raising your level of happiness is the ‘hedonic treadmill,’ which causes you to rapidly and inevitably adapt to good things by taking them for granted. As you accumulate more material possessions and accomplishments, your expectations rise. The deeds and things you worked so hard for no longer make you happy; you need to get something even better to boost your level of happiness.”

To counteract the effects of the hedonic treadmill you can choose to go without the item that initially made you happy. For instance, stop wearing your favorite pair of shoes for a month and then reintroduce them to your wardrobe. Wearing less comfortable/less stylish shoes for a month reminds you that you have it good with those kicks you rock on the regular. Distance makes the heart grow fonder, and in this case, makes you happier too.

What should I be buying in order to attain happiness?

There is a lot of research that says you should be buying experiences because they last longer, they are harder to compare to someone else’s experiences, and no one can ever take them away from you. Not to mention that there is a ton of “free happiness” that Dan Ariely describes in his book, Predictably Irrational that comes along with the anticipation of an experience.

But there is also research from San Francisco State University now suggesting that spending money on experiences also leaves us wanting.

This fascinating research suggests that ⅓ of consumers are highly materialistic. This cohort derives as much pleasure from spending money on material items as they do from purchasing experiences. So you have a 1 in 3 chance that this is you, and if it is, you have to consider whether or not the “buy experiences, not things” concept is a good fit for you.

The Sure Way Money Can Buy Happiness…

So if the advice, “buy experiences, not things” is not always best, what is a sure way you can buy happiness?

Step 1: Get out of debt, gosh darn it.

Having debt leads to massive unhappiness. When you’re in debt, you’re stressed, overwhelmed, and unable to build wealth. In fact, there is a ton of information saying that being in debt is a 1 way ticket to the land of misery. Debt robs you of peace of mind, intimacy with loved ones, and freedom, which are all essential ingredients to happiness. So first things first, get out of debt.

Step 2: Set your happiness priorities.

Figure out how you like to spend (or save) money by figuring out what means the most to you. Pay attention to what makes you truly happy. Figure out where your priorities lie and how much money you should allocate to boosting your long term happiness versus your instantaneous happiness.

For example, if your current job brings you misery. Money is the answer for that. Start saving right now so that you can build enough cash to find freedom. When you don’t rely on the monthly paycheck to make rent and eat, you can quit your job and find another that you enjoy.

Step 3: Give some of it away.

It’s a proven fact that giving money away is a great way to grab some of the happiness the world has to offer.

Step 4: Be grateful for what you have.

Gratitude is important for happiness. Appreciating little things, stopping to savor the sweet parts of life, and taking a break from your day to day routine to say ‘thank you’ to yourself and others has been proven to make you a happier person. However, it’s important not to generalize. For instance, don’t say “I’m thankful for my husband,” but instead to be detailed in your gratitude, such as, “I’m grateful that my husband is so diligent with our finances.”

Now we’d love to hear from you. Can money buy happiness?

Comments
    • Chelsea
    • February 21, 2017
    Reply

    The only people who actually think that money cannot buy happiness, are the types who have never had to choose between gas to go to work, and eating that day.

    Life without money also makes maintaining relationships MUCH more difficult, and to say otherwise is the equivalent of romanticizing the poor so that those with money don’t have to feel like anyone actually has it worse than they themselves…. To say this is is the epitome f ignorance and condescension.

    Some lady actually called a NATIONAL radio station the other day–and I kid you not– bawled her eyes out for twenty minutes because her otherwise healthy son needed an cochlear implant in ONE ear, which her insurance will fully cover by the way… and the radio host coddled this whiny wench for twenty damn minutes… I’m thinking, WOW what a wonderful problem to have! Something easily fixable; wish I had her problems… I have a five year old with severe autism who will likely never talk, and insurance covers NOTHING for her, and the state provides even less.

    Happiness might very well be “a choice” for privileged, self-entitled people like her who are so out-of-touch with the real world, that any minor inconvenience in an otherwise carefree life equates to a “tragedy”… Enough so to whine on a national radio program for twenty minutes because, ya know, what could be more tragic than a minor inconvenience with a healthy child?? However, for people like me, happiness will come in small, infrequent doses, such as when my nonverbal child makes eye contact and smiles at me, perhaps making me forget for a moment how the hell I am going to put food on the table.

    So yeah, I loathe that phrase “money can’t buy happiness” more than you know… Because it CAN buy happiness for those intelligent, creative, and NON-ENTITLED enough to make good use of it.

    • John G.
    • December 9, 2015
    Reply

    Hello there! Well, (a deep subject), been watching you guys for a while now and I guess it’s time to jump in and get my feet wet! I absolutely disagree that “money can buy happiness”. Nope, knott ever! Been on the planet for a long time now and it just cannot “buy” it. BUTT, it can rent it for a lifetime! I am, as stated, old…..that is why I came here……wanted to post on Craigslist AND knott make any mistakes……………with pix, etc. that is still a coming attraction…will advise. When do yo complete the PHD? John

      • Jacob
      • December 10, 2015
      Reply

      I like that John, it can rent happiness. I’ve got a little longer than a year until completion.

    • Carol Newlands
    • July 22, 2015
    Reply

    Yes, money can help us achieve what we want and make us happy but for me. Money can’t buy all. Maybe you have all the money, you go to different countries every month, buy an expensive car, build a wonderful house or buy jewelry but happiness is not all about those materials. Money does not come from ready made it come from your personal action.

  1. Reply

    Yes, money does make you happy though I like your third point about giving some of your money away. Therein lies true happiness…

    • Jeff
    • March 10, 2015
    Reply

    I love this topic and have heard the saying like everyone else. “Money can’t buy happiness”

    In my opinion it should be more like “Money can’t buy happiness, but not having money can make you miserable”

    As stated above, buying commercial goods is a temporary upper and by buying stuff today, in your case shoes, you destroy long term financial goals. I agree 100% that money is better spent on experiences than consumer items to a point. One of the areas in my life that brings me a ton of happiness are my toys. I spend (waste) a lot of money buying ATVs, snowmobiles, camping gear or parts for my muscle car. To me these are justified purchases. If someone were to ask me what makes me that happiest in the world, my answer would be to head out camping with the 5th wheel and my ATV with my family. Because I love this so much, we decided to buy a vacation property to camp on last summer. It is expensive and the missed investment opportunity is huge but in our life plan it is worth it. So to me buying certain things will bring me happiness.

    I realize that i got a bit off topic, and should state my point 🙂

    I work overseas in the oil in a country that the regular citizen is poor compared the average north american. These people are happy, they love their country and they are broke. There are a small few of them that I work with that have real money. If anything I would say that the level of happiness between the two groups of people is the same even though the “poor” group can’t afford to buy items over and above basic living items. I will bet anything that the people that have money would be devastated were they to lose some of their luxuries that the rest of the country doesn’t have and that the people who have never had, or never known about what it is like to have money it doesn’t make a difference to them, provided they can afford to live.

    I think you hit the nail on the head with your view on money. For me, if I were to make an extra 10% from what i do today, it would not make me more happy, if i could afford to buy a new pickup, it wouldn’t make me more happy, but if I lost enough of my income and had to start sacrificing the things I already have and bring me enjoyment in life, I would be miserable.

    • Michael
    • February 18, 2015
    Reply

    Happiness for me consists in giving . . and willingly serving others. One of my favorite quotes just about sums it up ~ “People are just as happy as they make up their minds to be.” ~ Abraham Lincoln

  2. Reply

    Sure money can buy happiness! I’ve even calculated exactly how much I need 🙂 I’ve recently wrote a post about how much I need to be happy, and it was around $70,000/year. Of course, I’m half joking, I come from a poor country and need be, I know I can live on a lot less and still be happy. I think ultimately I would like to have multiple streams of income, with a good chunk of passive income mixed in there, that would cover our expenses, and then I’d feel free and happy.

  3. Reply

    Reminds me a funny David Lee Roth quote that I read when I was a kid: “Money can’t buy you happiness but it can buy you a yacht big enough to pull up right alongside it.”

    My view of the money-happiness relationship is this: Money is a merely bridge to happiness. And I don’t necessarily mean cash money but currency, whether it’s in the form of time, talents, or whatever you have to trade for what you need and want.

    Having money for the sake of having money alone wouldn’t make me happy. My ego and self-confidence are not wrapped up in my bank account. But having money to do the things that truly make me happy – such as having the comfort of a secure home, being able to provide for the needs of my family, not having the stress of debt, being able to contribute to causes I care about, enjoying a few luxuries like travel and vintage VWs, etc – does make me happy.

  4. Reply

    I remember doing a report back in my 9th grade English class about happiness. I believe that the question revolved around whether money truly buys happiness or not. While we were all allowed to supposedly make up our own minds, the answer that we were SUPPOSED TO come up with is no, money doesn’t buy happiness. But, I’ve always had a problem with that assumption.

    It is very true that happiness does not necessarily come from money spent. In fact, very often the more money that people spend, the less happy be truly are. But, that isn’t the money’s fault – it is ours. People spend money because they believe happiness will be derived from it, but so very often, the “stuff” we buy ends up in the back of our closet collecting dust. No happiness.

    But certainly, money can buy happiness, but only if we buy the things that truly make us happy. The rub here is spending money on happy things, not stupid luxuries that nobody really needs. Fix this part, and money will ALWAYS buy happiness.

    • jack
    • January 2, 2015
    Reply

    My keys to happiness are, have no debt, keep your life simple, and try, whenever possible, to do what you love. And, never take yourself too seriously.

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  6. Reply

    “Can Money Buy Happiness?” got my attention because my answer when people say “money can’t buy happiness” is typically:

    You must not have ever had it!
    Or as Tony Robbins likes to say: “At least with money, you can have problems in style!”

    I think the most accurate answer is “Yes, it CAN… but it depends on the person, if it WILL.”

    There are SO many reasons it’s more fun/fulfilling/happy to have money as opposed to being broke.

    1) It eases the stress of covering basic necessities to live.
    2) LOTS of exciting and/or meaningful experiences cost money. Plain as that.
    3) You can bless others in a way that is impossible without money. Such as paying a private tuition, buying someone groceries, paying your neighbor’s mortgage while they’re going thru a rough patch, paying for mission trips, giving to charities, paying someone’s transportation so they can work, buying a police officer or soldiers restaurant meal to say “Thank You”..the list is endless.
    4) It’s a heck of a lot nicer to live in a safe home with a gorgeous view as opposed to a sketchy apartment with your neighbor banging around overhead.
    5) You don’t have to drive around on bald tires (that creates safety issues for you & family) because you don’t have the money for new ones.

    I could write for five hours and not run out of ways to describe why I think money can buy happiness.

    Happiness is a state of mind. There are happy poor people and miserable wealthy people. But if you are pretty much a content person enjoying this beautiful life you’ve been given, then YES, I’d say money will most definitely make you even happier.

    darlene
    p.s. geez, didn’t mean to write a book. LOL
    p.s.s I guess you know it’s impossible to do paragraphs in your comments?

  7. Reply

    I think money can buy happiness in a sense where you are not stressed out when you have to pay bill, but when it comes to other things like family/relationships, those parts in life can not be bought.

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  9. Reply

    You’ve hit the nail on this one. Money can — to a point — provide some level of happiness. Generally speaking, the happiness is associated with the experiences you have and/or give to another. Once we can meet our basic needs, money becomes less relevant in affecting happiness. This is a great reminder for methods that will keep the happiness flowing! Well said.

  10. Reply

    I think that, like you said, once your basic needs are met and you have adequate food, shelter, and safety, the margins for experiencing happiness through money are much lower. I find it better to just not focus on buying things at all–if we need something, we’ll get it. But otherwise, buying is not a form of therapy, hobby or fun for us. It’s a transaction for something we need. Experiences on the other hand, are far more appealing to me and I’m happy to spend the money to travel, etc.

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    • Allan
    • December 11, 2014
    Reply

    Hi,

    I like the hedonic treadmill! This is so true.

    And I do believe like you that money can buy happiness but only to a certain extent.

    The most important luxury money can buy is the freedom to own our own time and with freedom one could do a lot of different choices that might have been restricted by insufficient money such as going back to school to study something else and start a new career, spend more time with loved ones, visit the world etc…

    Debts restrict freedom and as such can cause unhappiness, stress and so on.

    Very interesting post.

    Thank you

  12. Reply

    Wonderful stuff, and I agree with all your points. I’m especially close to #1 and #2, with #3 close behind. It took me a while to get out of debt but I haven’t been close to it in almost 10 years now. I’ve set my priority for #2, though I admit it’s pretty high, but overall the goal is to never have to worry whether or not I can pay my bills again.

    As for #3… as more money started coming in I did start donating more of it to charity. The issue with me is donating anonymously because I hate being on a list, as they’ll start sending you stuff not asking for what you gave before but asking you to increase it. That’s kind of unfair, especially when you like to spread it around.

  13. Money will not buy happiness if you are not happy already with what you have. If you are unhappy, no one can make you happy. If you are unhappy and you get a windfall, you will become even more miserable than before.
    Be happy with what you have and enjoy building your wealth. And if you happen to win a lottery for example, then put it aside and learn to use it wisely. Don’t get into a trap of spending it for things which you think may make you happy but won’t.
    Look at Buffett. He has billions and yet he lives in an old house he held for years, drives old car. That doesn’t mean you be extra-frugal, but keep your same life style as you had before you made, won, got a big stash of cash and just treat yourself time to time with something what makes you happy at that moment, like traveling to Disneyland with your kids, helping others, or just have a nice dinner with your spouse.
    I was thinking many times what I would do if I get a lot of money. It would help me, but I realized I enjoy wealth building more than getting it for free.

  14. Reply

    Great post! I love the example of shoes because that’s one of my weaknesses for sure 🙂 I have been working on getting out of debt and also cutting down on the amount of “stuff” I own. This is making me happier already. With less stuff I can focus on the things I own that I actually enjoy and appreciate having.

  15. Indeed. That question is a like a cliche. My answer to it is YES! Money can take us to places we dream of and things we need that gave us happiness. Money is almost everything but we do not have to be a slave of it.

  16. Reply

    I love that you mentioned the importance of being grateful on the list! About a year ago I started taking time every day to be grateful for the good things in my life, and I think it’s made a big difference in terms of happiness.

  17. Reply

    Very interesting points on happiness. I think a lot of people have a misconception and backward view sometimes on happiness in general. Just this week I read a very interesting article over on the AhaNOW! blog titled “Why our ideas about happiness is backwards”.

    Sure, money can give us a temporary relief from the financial pressures of life, but just like anything else, we soon will get accustomed to the amount of money we have and begin to want more or better yet, misuse what we have.

    The things that I believe that leads to happiness is being grateful, kind, caring, compassionate, forgiving and things of that nature. Those attributes put us in a positive frame of mind and makes us aware of our many blessings. Money, a new house, cars, clothing, and all of that stuff really does not buy happiness.

    It may satisfy our immediate desires or needs that we think we have, but after the need is satisfied and the dust settles back to normalcy, then we have to ask ourselves if we are happy. What motivates and drives us to feel fulfilled. Many times it is not money.

    Sometimes we self-medicate by purchasing things and getting into debt, while if we focus on doing the things that can really lead to happiness, we would definitely end up in less debt. Awesome article and thanks for sharing.

  18. I’m glad you answered the question in the first sentence, because yes money can buy happiness at least for a little while. I love the point of being happy with what you have. I think for most people life is moving so fast that we forget to enjoy the moment and be grateful for what we have. If you have food, a job, and shelter you have a lot.

 

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