Your Money

Why money can buy happiness

- January 18, 2022 3 MIN READ
Money can buy happiness

What if the old saying was wrong? What if money can buy happiness and always has?

There are some things we’re told all the way through life which just don’t make sense. Sayings that people love to recycle without ever really thinking about them. That ‘money can’t buy happiness’ is right up there on the list.

I’m not convinced.

Boating people like to joke about the two best days of your life being the day you bought the boat, and the day you sold it. Well, they sound like two pretty damn great days, which 99 per cent of us will sadly never experience because buying a boat needs a whole lot of moola.

Firstly, let me ask this: does not having money ever cause unhappiness? Absolutely it does. Money problems are a leading cause of marital problems and ultimately divorce. In fact, research shows that 22 per cent of the time, a split is due to money issues.

It’s also a huge factor keeping people awake at night. If you can get through a sleepless night of anxiety and still be a happy person the next day, then you need to be researched by scientists, because that is not normal.

Ask anyone battling to get by on a household budget that’s bursting at the seams whether not having money causes them issues. It’s causing them issues. I’ll bet you anything they would agree that money can buy happiness.

‘It’s about experiences, not possessions’

Sure, some will say that life is about experiences, not possessions, but guess what? Experiences aren’t free. Henry David Thoreau said that “wealth is the ability to fully experience life.” But if I want to fully experience life, I’m going to need a whole lot of plane tickets, a private island somewhere in the Bahamas and a nice villa with a bathtubs full of caviar, thanks.

Keep in mind that Thoreau embraced voluntary poverty by removing himself from civilisation altogether. For those of us who don’t want to go full “Into the Wild” and prefer to stay with our clan, we’ll have to keep battling our way to the top of the financial food chain.

Money resolutions you really need to stick to

In fact, research from Harvard (that very expensive college which probably makes its students pretty happy, or at least their parents) says that money can buy happiness, but there’s a catch. Real happiness will come when the money is spent in the right way. For example, spending on experiences results in a much higher level of happiness than spending on material goods.

This is because we tend to adapt to physical things, no matter how excited we are about buying them. Whereas the psychological benefits of an experience (aka the memory) are much stronger and longer lasting.

Spending on other people

Another of the “right ways” to spend money happily is not even on yourself!

Researchers handed students at the University of British Columbia a $5 or $20 note, and were asked to spend the cash on themselves or others by the end of the day. And surprise surprise, those who spent it on others – even if it was only $5 – felt happier.

Another Harvard study asked employees about their general happiness levels before and after receiving their annual bonus. And no matter what size the bonus was, employees who spent more of their bonus money on others reported greater general happiness levels than those who spent more of it on themselves.

If you’re going to have money and want it to make you happy, you’ve got to approach it a certain way. Whether that’s through being a generous friend, donating to charity or having the freedom to volunteer. Having money and spending it on others has great emotional rewards and increases your happiness.

Interestingly, while it used to be understood that your happiness levels maxed out at $75k, that’s since been disproven. More recent research found that it’s actually more like $95K where happiness lies.

What are the best moments of your day?

Think about some of the best moments you get on a day-to-day or week-to-week basis. Does it include when your online shopping delivery turns up at your door? How about a delicious budget-breaking meal at a way-too-expensive restaurant?

Hey, maybe I’m wrong. Maybe the best part of your week is standing in the supermarket aisles calculating which tin of sweet corn is cheapest. Or waiting in line for the bus to work. Or maybe it’s hanging up your underwear instead of throwing it in the dryer to save on your electricity bill?

If that’s you, then congratulations. You are blessed with an ability to be content with little. Which really should probably everyone’s goal rather than striving for a happiness that is just way too hard to reach.