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Does More Money Really Make Us More Happy?

• Elizabeth Dunn
• Chris Courtney

A big paycheck won’t necessarily bring you joy

Although some studies show that wealthier people tend to be happier, prioritizing money over time can actually have the opposite effect.

• But even having just a little bit of extra cash in your savings account ($500), can increase your life satisfaction. So how can you keep more cash on hand?
• Ask yourself: What do I buy that isn’t essential for my survival? Is the expense genuinely contributing to my happiness? If the answer to the second question is no, try taking a break from those expenses.
• Other research shows there are specific ways to spend your money to promote happiness, such as spending on experiences, buying time, and investing in others.
• Spending choices that promote happiness are also dependent on individual personalities, and future research may provide more individualized advice to help you get the most happiness from your money.

Where your work meets your life. See more from Ascend here .

How often have you willingly sacrificed your free time to make more money? You’re not alone. But new research suggests that prioritizing money over time may actually undermine our happiness.

• ED Elizabeth Dunn is a professor of psychology at the University of British Columbia and Chief Science Officer of Happy Money, a financial technology company with a mission to help borrowers become savers. She is also co-author of “ Happy Money: The Science of Happier Spending ” with Dr. Michael Norton. Her TED2019 talk on money and happiness was selected as one of the top 10 talks of the year by TED.
• CC Chris Courtney is the VP of Science at Happy Money. He utilizes his background in cognitive neuroscience, human-computer interaction, and machine learning to drive personalization and engagement in products designed to empower people to take control of their financial lives. His team is focused on creating innovative ways to provide more inclusionary financial services, while building tools to promote financial and psychological well-being and success.

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More Proof That Money Can Buy Happiness (or a Life with Less Stress)

When we wonder whether money can buy happiness, we may consider the luxuries it provides, like expensive dinners and lavish vacations. But cash is key in another important way: It helps people avoid many of the day-to-day hassles that cause stress, new research shows.

Money can provide calm and control, allowing us to buy our way out of unforeseen bumps in the road, whether it’s a small nuisance, like dodging a rainstorm by ordering up an Uber, or a bigger worry, like handling an unexpected hospital bill, says Harvard Business School professor Jon Jachimowicz.

“If we only focus on the happiness that money can bring, I think we are missing something,” says Jachimowicz, an assistant professor of business administration in the Organizational Behavior Unit at HBS. “We also need to think about all of the worries that it can free us from.”

The idea that money can reduce stress in everyday life and make people happier impacts not only the poor, but also more affluent Americans living at the edge of their means in a bumpy economy. Indeed, in 2019, one in every four Americans faced financial scarcity, according to the Board of Governors of the Federal Reserve System. The findings are particularly important now, as inflation eats into the ability of many Americans to afford basic necessities like food and gas, and COVID-19 continues to disrupt the job market.

Buying less stress

The inspiration for researching how money alleviates hardships came from advice that Jachimowicz’s father gave him. After years of living as a struggling graduate student, Jachimowicz received his appointment at HBS and the financial stability that came with it.

“My father said to me, ‘You are going to have to learn how to spend money to fix problems.’” The idea stuck with Jachimowicz, causing him to think differently about even the everyday misfortunes that we all face.

To test the relationship between cash and life satisfaction, Jachimowicz and his colleagues from the University of Southern California, Groningen University, and Columbia Business School conducted a series of experiments, which are outlined in a forthcoming paper in the journal Social Psychological and Personality Science , The Sharp Spikes of Poverty: Financial Scarcity Is Related to Higher Levels of Distress Intensity in Daily Life .

Higher income amounts to lower stress

In one study, 522 participants kept a diary for 30 days, tracking daily events and their emotional responses to them. Participants’ incomes in the previous year ranged from less than $10,000 to $150,000 or more. They found:

• Money reduces intense stress: There was no significant difference in how often the participants experienced distressing events—no matter their income, they recorded a similar number of daily frustrations. But those with higher incomes experienced less negative intensity from those events.
• More money brings greater control : Those with higher incomes felt they had more control over negative events and that control reduced their stress. People with ample incomes felt more agency to deal with whatever hassles may arise.
• Higher incomes lead to higher life satisfaction: People with higher incomes were generally more satisfied with their lives.

“It’s not that rich people don’t have problems,” Jachimowicz says, “but having money allows you to fix problems and resolve them more quickly.”

Why cash matters

In another study, researchers presented about 400 participants with daily dilemmas, like finding time to cook meals, getting around in an area with poor public transportation, or working from home among children in tight spaces. They then asked how participants would solve the problem, either using cash to resolve it, or asking friends and family for assistance. The results showed:

• People lean on family and friends regardless of income: Jachimowicz and his colleagues found that there was no difference in how often people suggested turning to friends and family for help—for example, by asking a friend for a ride or asking a family member to help with childcare or dinner.
• Cash is the answer for people with money: The higher a person’s income, however, the more likely they were to suggest money as a solution to a hassle, for example, by calling an Uber or ordering takeout.

While such results might be expected, Jachimowicz says, people may not consider the extent to which the daily hassles we all face create more stress for cash-strapped individuals—or the way a lack of cash may tax social relationships if people are always asking family and friends for help, rather than using their own money to solve a problem.

“The question is, when problems come your way, to what extent do you feel like you can deal with them, that you can walk through life and know everything is going to be OK,” Jachimowicz says.

Breaking the ‘shame spiral’

In another recent paper , Jachimowicz and colleagues found that people experiencing financial difficulties experience shame, which leads them to avoid dealing with their problems and often makes them worse. Such “shame spirals” stem from a perception that people are to blame for their own lack of money, rather than external environmental and societal factors, the research team says.

“We have normalized this idea that when you are poor, it’s your fault and so you should be ashamed of it,” Jachimowicz says. “At the same time, we’ve structured society in a way that makes it really hard on people who are poor.”

For example, Jachimowicz says, public transportation is often inaccessible and expensive, which affects people who can’t afford cars, and tardy policies at work often penalize people on the lowest end of the pay scale. Changing those deeply-engrained structures—and the way many of us think about financial difficulties—is crucial.

After all, society as a whole may feel the ripple effects of the financial hardships some people face, since financial strain is linked with lower job performance, problems with long-term decision-making, and difficulty with meaningful relationships, the research says. Ultimately, Jachimowicz hopes his work can prompt thinking about systemic change.

“People who are poor should feel like they have some control over their lives, too. Why is that a luxury we only afford to rich people?” Jachimowicz says. “We have to structure organizations and institutions to empower everyone.”

[Image: iStockphoto/mihtiander]

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How Does Valuing Money Affect Your Happiness?

It may seem that money is a sure path to prestige and happiness. After all, many of our most well-paid citizens are held up as role models of success, leading seemingly perfect, enviable lives. Still, some people embrace the opposite idea: Money can’t buy you happiness. So, which of these is right?

In recent studies, scientists have found that the connection between wealth and well-being is not clear-cut. While some studies seem to tie wealth to well-being, others show that, after a certain point, a higher income will not bring more happiness or life satisfaction.

Now two new studies shed further light on the relationship between wealth and happiness. Their findings suggest that money doesn’t fulfill basic psychological needs, like belonging and competence. That’s why making more of it will not increase your happiness, even if you value money above other things. In fact, it may do the opposite.

What money can and can’t do for you

In one study , University of Buffalo researcher Lora Park and her colleagues investigated what happens when people tie their self-worth to financial success, scoring high on the “Financial Contingency of Self-Worth” scale, or FCWS. The researchers found that doing so made people engage in more social comparisons, experience more stress and anxiety, and feel less autonomy than those who didn’t tie their self-worth to income, regardless of their actual economic status.

“People in this society are often focused on pursuing money, and they don’t think there is anything bad about that,” says Park. “But in terms of your psychological well-being, there are all kinds of negative consequences.”

It also might affect your problem-solving ability. Park and her colleagues randomly assigned participants to write about their dissatisfaction with either an aspect of their financial situation—like not having enough money to pay rent—or their academic performance, like getting a bad test grade. Afterwards, they reported on what coping strategies they would use in response to the situation.

Research assistants analyzed the essays and found that participants who scored high in FCSW used more emotionally negative words and reported more disengagement strategies—like giving up or avoiding solutions—when writing about a financial stressor versus an academic stressor than people scoring low in FCSW. None of the results were affected by the actual income of the students.

People who are facing a problem should, logically, be focused on figuring out ways to solve it, says Park. “But what we found is that high financial contingency of self-worth somehow blocks that response.”

Why would this be?

Park believes that when people feel their self-concept is threatened in some way, they will become more self-protective so as not to experience low self-esteem. So, if your self-esteem is tied to money, a financial stressor will cause a lot more stress than it would for someone who doesn’t feel that way. Some support for her argument comes from another part of her experiment, where having participants high in FCSW remind themselves of their character strengths—like their intelligence or sense of humor—seemed to negate these avoidance effects.

Affirming Important Values

When your self-image takes a hit, reflect on what matters

“When people take a step back and have a broader perspective on their sense of self, that’s often enough to take them out of the self-esteem rumination/narrow focus they otherwise have,” says Park.

As prior research suggests, it can also be the case that people simply want money to do something that it cannot. “Self-esteem, like happiness, is a byproduct of meeting psychological needs—like meaning or purpose, feeling competent, having close relationships, or having a sense of autonomy—and basing your self-worth on financial success actually detracts from fulfilling those needs,” says Park.

Why community beats money

Park’s findings mirror other recent findings from the University of San Francisco’s Matthew Monnot, who studied financial success and well-being in China.

In his study , Monnot notes that, as China’s economy has grown, its citizens seem to be facing some of the same issues that Americans have faced. A growing number of people equate individual success with making more money and valuing money—an extrinsic reward—over other, more intrinsic rewards, like relationships or community. To see how this trend has affected well-being, he conducted a series of studies involving thousands of participants from several cities in China.

In one experiment, Monnot showed that job satisfaction did not rise in tandem with income. In fact, as with prior studies, wealth beyond a certain point tended to make Chinese workers no more satisfied with their jobs or their incomes, suggesting that money has only so much power to increase our life satisfaction.

“Our findings are pretty aligned with prior research,” says Monnot. “The correlation between income and job satisfaction is really small, to the extent that it predicts about five percent of job satisfaction.”

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To tease out why, Monnot looked at how individual values shape the relationship between money and income satisfaction. He asked participants to pick the five factors they thought were most important for well-being from a list of 25 possible choices—including income—and then measured how satisfied they were with their income as it rose. Though one might expect people valuing income to be happier as they made more money, Monnot found the opposite: People who picked income as an important value were significantly less satisfied, even at higher levels.

“If income is important to you, then income is actually less satisfying as income goes up than if income is not important to you,” he says.

Though this seems paradoxical, Monnot says it makes some sense, when you understand how intrinsic versus extrinsic values affect our happiness.

“Not all goals are equal in terms of producing well-being, productivity, job satisfaction, or life satisfaction,” says Monnot. “If you say income is something really important to you, because income is an extrinsic reward and not part of your intrinsic needs, if you focus on it, it won’t make you happy.”

In other words, look inside of yourself, not your wallet, for happiness.

Monnot was curious to see how living in different cities in China might affect the relationship between valuing income and well-being. After all, if the government is developing policies to increase income in certain areas of the country, it would be good to know the impact this is having on happiness.

Again, he had people pick out five things they valued; but this time he separated people into different groups depending on whether they placed high value on materialistic things, like income and status, and placed low value on relationships and community, or vice versa. When he compared these two groups, people who valued relationships or community versus materialistic things had greater job satisfaction and overall life satisfaction. This was true regardless of their city’s per-capita income.

“The big idea is that higher GDP or people having more money is all great—especially at a societal level. You want your economy to be more productive and to have more resources and money available,” says Monnot. “Well, maybe that’s not necessarily in and of itself something that’s going to produce a happier population.”

Both Monnot and Park hope that their research might lead people to think a bit differently about the supposed benefits of striving for more money. Though neither would deny that we need money to survive, valuing it too highly or tying it to your self-worth is clearly a mistake.

Monnot hopes his research might help individuals—and business leaders and policymakers—to realize that fulfilling psychological needs is more important to happiness than making a lot of money.


“Autonomy, developing a skill set to be good at what you do, being affiliative with others, having a sense of connection to your community—these are all things that we as researchers are fairly convinced are innate, evolved human tendencies that bring happiness,” he says.

“If you can get people to focus on fulfilling those needs, they’ll become happier. The research is strongly in favor of that.”

About the Author

Jill Suttie

Jill Suttie, Psy.D. , is Greater Good ’s former book review editor and now serves as a staff writer and contributing editor for the magazine. She received her doctorate of psychology from the University of San Francisco in 1998 and was a psychologist in private practice before coming to Greater Good .

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Does Money Buy Happiness? Here’s What the Research Says

March 28, 2023 • 5 min read.

Reconciling previously contradictory results, researchers from Wharton and Princeton find a steady association between larger incomes and greater happiness for most people but a rise and plateau for an unhappy minority.

• Finance & Accounting

The following article was originally published on Penn Today .

Does money buy happiness? Though it seems like a straightforward question, research had previously returned contradictory findings, leaving uncertainty about its answer.

Foundational work published in 2010 from Princeton University’s  Daniel Kahneman  and Angus Deaton had found that day-to-day happiness rose as annual income increased, but above $75,000 it leveled off and happiness plateaued. In contrast, work published in 2021 from the University of Pennsylvania’s  Matthew Killingsworth  found that happiness rose steadily with income well beyond $75,000, without evidence of a plateau.

To reconcile the differences, Kahneman and Killingsworth paired up in what’s known as an adversarial collaboration, joining forces with Penn Integrates Knowledge  University Professor  Barbara Mellers  as arbiter. In a new  Proceedings of the National Academy of Sciences  paper , the trio shows that, on average, larger incomes are associated with ever-increasing levels of happiness. Zoom in, however, and the relationship becomes more complex, revealing that within that overall trend, an unhappy cohort in each income group shows a sharp rise in happiness up to $100,000 annually and then plateaus.

“In the simplest terms, this suggests that for most people larger incomes are associated with greater happiness,” says Killingsworth, a senior fellow at Wharton and lead paper author. “The exception is people who are financially well-off but unhappy. For instance, if you’re rich and miserable, more money won’t help. For everyone else, more money was associated with higher happiness to somewhat varying degrees.”

Mellers digs into this last notion, noting that emotional well-being and income aren’t connected by a single relationship. “The function differs for people with different levels of emotional well-being,” she says. Specifically, for the least happy group, happiness rises with income until $100,000, then shows no further increase as income grows. For those in the middle range of emotional well-being, happiness increases linearly with income, and for the happiest group the association actually accelerates above $100,000.

Joining Forces to Ask: “Does Money Buy Happiness?”

The researchers began this combined effort recognizing that their previous work had drawn different conclusions. Kahneman’s 2010 study showed a flattening pattern where Killingsworth’s 2021 study did not. As its name suggests, an adversarial collaboration of this type — a notion originated by Kahneman — aims to solve scientific disputes or disagreements by bringing together the differing parties, along with a third-party mediator.

Killingsworth, Kahneman, and Mellers focused on a new hypothesis that both a happy majority and an unhappy minority exist. For the former, they surmised, happiness keeps rising as more money comes in; the latter’s happiness improves as income rises but only up to a certain income threshold, after which it progresses no further.

To test this new hypothesis, they looked for the flattening pattern in data from Killingworth’s study, which he had collected through an app he created called Track Your Happiness. Several times a day, the app pings participants at random moments, asking a variety of questions including how they feel on a scale from “very good” to “very bad.” Taking an average of the person’s happiness and income, Killingsworth draws conclusions about how the two variables are linked.

A breakthrough in the new partnership came early on when the researchers realized that the 2010 data, which had revealed the happiness plateau, had actually been measuring unhappiness in particular rather than happiness in general.

“It’s easiest to understand with an example,” Killingsworth says. Imagine a cognitive test for dementia that most healthy people pass easily. While such a test could detect the presence and severity of cognitive dysfunction, it wouldn’t reveal much about general intelligence since most healthy people would receive the same perfect score.

“In the same way, the 2010 data showing a plateau in happiness had mostly perfect scores, so it tells us about the trend in the unhappy end of the happiness distribution, rather than the trend of happiness in general. Once you recognize that, the two seemingly contradictory findings aren’t necessarily incompatible,” Killingsworth says. “And what we found bore out that possibility in an incredibly beautiful way. When we looked at the happiness trend for unhappy people in the 2021 data, we found exactly the same pattern as was found in 2010; happiness rises relatively steeply with income and then plateaus.”

“The two findings that seemed utterly contradictory actually result from data that are amazingly consistent,” he says.

Does It Matter Whether Money Can Buy Happiness?

Drawing these conclusions would have been challenging had the two research teams not come together, says Mellers, who suggests there’s no better way than adversarial collaborations to resolve scientific conflict.

“This kind of collaboration requires far greater self-discipline and precision in thought than the standard procedure,” she says. “Collaborating with an adversary — or even a non-adversary — is not easy, but both parties are likelier to recognize the limits of their claims.” Indeed, that’s what happened, leading to a better understanding of the relationship between money and happiness.

And these findings have real-world implications, according to Killingsworth. For one, they could inform thinking about tax rates or how to compensate employees. And, of course, they matter to individuals as they navigate career choices or weigh a larger income against other priorities in life, Killingsworth says.

However, he adds that for emotional well-being money isn’t the be all end all. “Money is just one of the many determinants of happiness,” he says. “Money is not the secret to happiness, but it can probably help a bit.”

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Research: Can Money Buy Happiness?

In his quarterly column, Francis J. Flynn looks at research that examines how to spend your way to a more satisfying life.

September 25, 2013

A boy looks at a toy train he received during an annual gift-giving event on Christmas Eve 2011. | Reuters/Jose Luis Gonzalez

What inspires people to act selflessly, help others, and make personal sacrifices? Each quarter, this column features one piece of scholarly research that provides insight on what motivates people to engage in what psychologists call “prosocial behavior” — things like making charitable contributions, buying gifts, volunteering one‘s time, and so forth. In short, it looks at the work of some of our finest researchers on what spurs people to do something on behalf of someone else.

In this column I explore the idea that many of the ways we spend money are prosocial acts — and prosocial expenditures may, in fact, make us happier than personal expenditures. Authors Elizabeth Dunn and Michael Norton discuss evidence for this in their new book, Happy Money: The Science of Smarter Spending . These behavioral scientists show that you can get more out of your money by following several principles — like spending money on others rather than yourself. Moreover, they demonstrate that these principles can be used not only by individuals, but also by companies seeking to create happier employees and more satisfying products.

According to Dunn and Norton, recent research on happiness suggests that the most satisfying way of using money is to invest in others. This can take a seemingly limitless variety of forms, from donating to a charity that helps strangers in a faraway country to buying lunch for a friend.

Witness Bill Gates and Warren Buffet, two of the wealthiest people in the world. On a March day in 2010, they sat in a diner in Carter Lake, Iowa, and hatched a scheme. They would ask America‘s billionaires to pledge the majority of their wealth to charity. Buffet decided to donate 99 percent of his, saying, “I couldn‘t be happier with that decision.”

And what about the rest of us? Dunn and Norton show how we all might learn from that example, regardless of the size of our bank accounts. Research demonstrating that people derive more satisfaction spending money on others than they do spending it on themselves spans poor and rich countries alike, as well as income levels. The authors show how this phenomenon extends over an extraordinary range of circumstances, from a Canadian college student purchasing a scarf for her mother to a Ugandan woman buying lifesaving malaria medication for a friend. Indeed, the benefits of giving emerge among children before the age of two.

Investing in others can make individuals feel healthier and wealthier, even if it means making yourself a little poorer to reap these benefits. One study shows that giving as little as $1 away can cause you to feel more flush.

Quote Investing in others can make you feel healthier and wealthier, even if it means making yourself a little poorer.

Dunn and Norton further discuss how businesses such as PepsiCo and Google and nonprofits such as DonorsChoose.org are harnessing these benefits by encouraging donors, customers, and employees to invest in others. When Pepsi punted advertising at the 2010 Superbowl and diverted funds to supporting grants that would allow people to “refresh” their communities, for example, more public votes were cast for projects than had been cast in the 2008 election. Pepsi got buzz, and the company‘s in-house competition also offering a seed grant boosted employee morale.

Could this altruistic happiness principle be applied to one of our most disputed spheres — paying taxes? As it turns out, countries with more equal distributions of income also tend to be happier. And people in countries with more progressive taxation (such as Sweden and Japan) are more content than those in countries where taxes are less progressive (such as Italy and Singapore). One study indicated that people would be happier about paying taxes if they had more choice as to where their money went. Dunn and Norton thus suggest that if taxes were made to feel more like charitable contributions, people might be less resentful having to pay them.

The researchers persuasively suggest that the proclivity to derive joy from investing in others may well be just a fundamental component of human nature. Thus the typical ratio we all tend to fall into of spending on self versus others — ten to one — may need a shift. Giving generously to charities, friends, and coworkers — and even your country — may well be a productive means of increasing well-being and improving our lives.

Research selected by Francis Flynn, Paul E. Holden Professor of Organizational Behavior at Stanford Graduate School of Business.

For media inquiries, visit the Newsroom .

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One More Time, Does Money Buy Happiness?

• Published: 19 September 2023
• Volume 18 , pages 3089–3110, ( 2023 )

Cite this article

• James Fisher   ORCID: orcid.org/0000-0001-9201-4204 1 &
• Michael Frechette   ORCID: orcid.org/0000-0002-8193-6796 2  

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This paper integrates multiple positions on the relationship between money and well-being, commonly referred to as happiness. An aggregation of prior work appears to suggest that money does buy happiness, but not directly. Although many personal and situational characteristics do influence the relationship between money and happiness, most are moderating factors, which would not necessarily rule out a direct link. Here, we discuss the cognitive and affective elements within the formation of happiness, which we propose play a series of mediating roles, first cognition, then affect, between money and happiness. The paper concludes with a discussion about how this proposal influences academic research and society as a whole.

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The Functional and Dysfunctional Aspects of Happiness: Cognitive, Physiological, Behavioral, and Health Considerations

Happiness, Economics of

What We Have Learnt About Happiness

Materials and/or code availability.

There are no materials or code related to this manuscript.

Data Availability

This conceptual study collected no original data. Citations are given to the original sources when referencing data or results from prior studies.

“As far as I am aware, in every representative national survey ever done a significant positive bivariate relationship between happiness and income has been found.” (Easterlin 2001 , 468). Easterlin supports this assertion with references to Andrews 1996 , xi; Argyle 1999 , 356–57; and Diener 1984 , 553.

A simple correlation of 0.2 is an oft-cited benchmark (cf. Easterlin 2001 , who labels it “highly significant”). At the same time, many researchers qualify the relationship, saying that income ultimately explains relatively little of the variance in self-reports of happiness: e.g., Ahuvia ( 2017 , 18) generalizes that “typically studies in developed economies indicate that income explains only about 3% of the difference in happiness.” Some twenty years prior to Ahuvia’s assessment, Frank ( 1997 ) offered a similar conclusion: the relationship between income and happiness is closer at lower levels of income than for middle- or upper-income households, where "variations in income explain less than 2% of variations in reported satisfaction levels” (citing Diener and Diener 1995 on 1835). Diener and Biswas-Diener ( 2002 , 123) summarize over a dozen correlations between income and subjective well-being, most ranging between 0.15 and 0.25. Kahneman and Deaton ( 2010 ) recommend that efforts to estimate the relationship between that subjective well-being and income should rely on a logarithmic transformation of income, providing a rationale based on Weber’s Law, having to do with the perception of change reflecting the percentage change and not the absolute change.

This literature review reflects the authors’ point-of-view that in answering the question of “how” money buys happiness economists have offered the highest-level, abstract answer (i.e., through a process of utility-maximization); psychologists and researchers into subjective well-being have sought a more precise accounting of what money buys vis-à-vis individual dispositions (e.g., personality) and motivations (e.g., materialism) as well as cultural or national determinants (e.g., individualism versus collectivism); and marketers and consumer researchers have inquired in the most detailed way as to how money delivers particular experiences and effects throughout the continuum of pre-purchase processes, the experience of consumption and post-purchase satisfaction.

Happiness data are a relative late-comers to economic analyses of this sort: “[T]he approach departs from a long tradition in economics that shies away from using what people say about their feelings. Instead, economists have built their trade by analyzing what people do and, from these observations and some theoretical assumptions about the structure of welfare, deducing the implied changes in happiness” (Di Tella and MacCulloch 2006 , 43). Kahneman and Krueger ( 2006 , 3) express a similar opinion: “[E]conomists have had a long-standing preference for studying peoples’ revealed preferences; that is, looking at individuals’ actual choices and decisions rather than their stated intentions or subjective reports of likes and dislikes.”.

An assertion strenuously challenged by Diener and Oishi 2000 and more modestly objected to by Frank ( 1997 , 1820), who interprets the data to say that there “is only slight evidence … that greater economic prosperity leads to more well-being in a nation.”.

Cummins ( 2000 ), in his review of personal income and subjective well-being, constructs a couple of straw men that reflect his estimation of how researchers into quality of life may view income ambivalently. At the outset of the review article, his abstract announces, "Conventional wisdom holds that money has little relevance to happiness." Later in the same review article, he identifies a bias "that can quite commonly be found within the QOL literature" (p. 139) that the rich are not as satisfied with their lot as commonly imagined. Chambers ( 1997 ) provides him with a suitable proof text in which "the link between wealth and well-being is weak or even negative" and therefore, "amassing wealth does not assure well-being and may diminish it” (at 1728 in Chambers). Cummins himself disavows this disciplinary tendency, ultimately labeling it “fanciful.”.

When it comes to terms like subjective well-being, life satisfaction, and happiness, there is some variation in the precision of the terminology. Thus, Kahneman and Krueger ( 2006 ) use life satisfaction and happiness as roughly synonymous in discussing the measurement of well-being and in emphasizing the measurement of emotional states. On the other hand, Diener may commonly use the term happiness as a convenient and widely used construct but will employ more precision in measuring or analyzing "types of well-being.".

E.g., basic needs met, psychological needs met, and satisfaction with living standards in Diener, Ng, Harter and Arora ( 2010 , 56).

E.g., pleasant affect, unpleasant affect, life satisfaction, and domain satisfaction in Diener, Suh, Lucas and Smith ( 1999 , 277).

Dunn et al. ( 2011 ) stake out this position with their article’s title “If money doesn’t make you happy, then you probably aren’t spending it right.”.

Thus, Scitovsky’s title, The Joyless Economy .

Actually, it is nice to be rich. (2023, March 24). The Week , 33.

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Fisher, J., Frechette, M. One More Time, Does Money Buy Happiness?. Applied Research Quality Life 18 , 3089–3110 (2023). https://doi.org/10.1007/s11482-023-10221-9

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Received : 26 November 2022

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DOI : https://doi.org/10.1007/s11482-023-10221-9

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When and How Money Buys Happiness

A new study investigates the effects of money-making motives on mental health..

Posted January 22, 2022 | Reviewed by Devon Frye

• The relationship between money and happiness is complicated and may depend on a person’s financial situation and how the money is used.
• Money buys happiness for people who are unable to meet their basic needs (e.g., for food, shelter, clothing).
• Beyond meeting basic needs, more money increases happiness only if used to satisfy psychological needs (e.g., autonomy, competence, relatedness).

Does money buy happiness ? It depends. If you are poor and unable to afford basic necessities (e.g., food, shelter, clothes), then yes. But if you already have millions of dollars in the bank, whether more money will make you happier depends on how the additional money is spent.

For instance, materialists often end up spending money in ways that do not increase their happiness. Materialism refers to a value or belief system that gives greater importance to worldly ambitions and owning possessions. Using money to acquire material possessions for their own sake , however, is less likely to increase happiness than spending money to satisfy psychological needs — increasing one’s autonomy , building strong social bonds, learning new things, using one’s skills, etc.

So to understand the relationship between money and happiness, it's important to understand the reasons or motives for desiring wealth (i.e. I want more money to spend on... what ?) Building on previous research, a recent study uses self-determination theory to explore money-making motives, the impact of motives on well-being and mental health, and whether it is possible to promote “healthy reasons” for making money. This investigation, by researchers Manganelli and Forest, is to be published in the February 2022 issue of Applied Research in Quality of Life .

Investigating the Link Between Money and Happiness

Sample: 633 (66 percent women); average age of 34 years old.

Measures: Motives for Making Money Scale, which measures ten motives for making money. These motives are listed below (with sample items in parentheses):

• Charity (To donate money to those who need it.)
• Family support (To take care of the college education of my children.)
• Freedom (To direct my own life with no interference from anyone else.)
• Impulse (To spend money on impulse.)
• Leisure (To spend time and money on my hobbies.)
• Market worth (To get just compensation for my work.)
• Overcoming self-doubt (To prove that I am not as dumb as some people assumed.)
• Pride (To feel proud of myself.)
• Security (To maintain a reasonable bank balance for emergencies.)
• Social comparison (To have a house and cars that are better than those of my neighbors.)

Sample: 464 (55 percent women); average age of 31 years old.

Measures: Motives for Making Money Scale and five other measures, as described below.

• Need satisfaction: The needs for autonomy (“I feel my choices express my true self”), competence (“I feel I can successfully complete difficult tasks”), and relatedness (“I feel close and connected with other people who are important to me”) were measured using the Balanced Measure of Psychological Needs Scale.
• Need frustration: The frustration of the needs for autonomy (“I feel prevented from making choices with regard to the way I do things”), competence (“There are situations in which I am made to feel inadequate”), and relatedness (“I feel other people dislike me”) were evaluated using the Psychological Need Thwarting Scale.
• Well-being: Positive affect (the frequency of experiencing positive emotions) was assessed using the short form of the Positive and Negative Affect Schedule (PANAS-SF). General well-being was assessed with the Measure of Psychological Well-being (level of agreement with seven items such as “My life has meaning and purpose”).
• Ill-being: The negative affect subscale of PANAS-SF assessed the frequency of experiencing negative emotions. In addition, symptoms of depression (e.g., fatigue, insomnia , poor appetite ) were measured using the Center for Epidemiologic Studies Depression Scale short form.
• Materialism: Assessed with the Materialistic Values Scale (level of agreement with nine items such as “I admire people who own expensive homes, cars, and clothes”).

The experimental group: 19 (15 women); average age of 41 years old.

The control group: 21 (12 women); average age of 24 years old.

Measures: Motives for Making Money Scale; in addition, a manipulation check was conducted to determine if the intervention (a workshop on motives for making money) had the expected effect. Specifically, participants in the experimental group were asked if the workshop had helped them identify their motives for making money, affected their spending habits, and changed their perception of money.

Healthy and Unhealthy Motives to Make Money

The research examined what motivates us to make money, the impact of these motives on mental health, and the possibility of encouraging people to adopt healthy motives for making money.

The first investigation concluded that money-making motives can be divided into three:

• Self-integrated (including charity, freedom, market worth, pride, and leisure)
• Non-integrated (including impulse, overcoming self-doubt, and social comparison)
• Financial stability (including security and family support)

The second investigation found that self-integrated reasons for desiring money are associated with great satisfaction of psychological need for autonomy, competence, and relatedness—and thus with greater well-being. Amassing wealth for non-integrated reasons , in contrast, is associated with the frustration of psychological needs and greater ill-being.

The motive of financial stability was also linked with higher need satisfaction and well-being. Why? Perhaps because money spent to satisfy basic needs (for oneself and one’s family) often increases the sense of autonomy and competence and strengthens relationships, thus improving well-being.

Analysis of data indicated that need frustration explained the negative effects of materialism on mental health; however, these effects were “fully accounted for by the non-integrated motives for making money.” Specifically, materialism’s adverse effects on mental health occur because materialistic individuals tend to “spend money impulsively, especially to compensate for feelings of self-doubt as well as to appear better than others.”

Finally, findings from Study 3 suggest it may be possible to help people become more aware of their money motives and to discourage “non-integrated motives.” Study 3 had several limitations (e.g., small sample size), so the results await replication.

Money can buy happiness. This is true for two groups:

• Those who cannot afford life’s basic necessities and want money to satisfy their physiological and safety needs (e.g., food, shelter, clothes).
• Those who aim to use the money to satisfy their basic psychological needs—the need for autonomy, competence, and relatedness (e.g., to run their own business, master a skill, help a stranger).

Arash Emamzadeh attended the University of British Columbia in Canada, where he studied genetics and psychology. He has also done graduate work in clinical psychology and neuropsychology in U.S.

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Happiness Economics: Can Money Buy Happiness?

It only costs a small amount, a slight risk, with the possibility of a substantial reward.

But will it make you happy? Will it give you long-lasting happiness?

Undoubtedly, there will be a temporary peak in happiness, but will all your troubles finally fade away?

That is what we will investigate today. We explore the economics of happiness and whether money can buy happiness. In this post, we will start by broadly exploring the topic and then look at theories and substantive research findings. We’ll even have a look at previous lottery winners.

For interested readers, we will list interesting books and podcasts for further enjoyment and share a few of our own happiness resources.

Ka-ching: Let’s get rolling!

Before you continue, we thought you might like to download our three Happiness & Subjective Wellbeing Exercises for free . These detailed, science-based exercises will help you or your clients identify sources of authentic happiness and strategies to boost wellbeing.

This Article Contains

What is happiness economics, theory of the economics of happiness, can money buy happiness 5 research findings, 6 fascinating books and podcasts on the topic, resources from positivepsychology.com, a take-home message.

Happiness economics is a field of economics that recognizes happiness and wellbeing as important outcome measures, alongside measures typically used, such as employment, education, and health care.

Economics emphasizes how specific economic/financial characteristics affect our wellbeing (Easterlin, 2004).

For example, does employment result in better health and longer lifespan, among other metrics? Do people in wealthier countries have access to better education and longer life spans?

In the last few decades, there has been a shift in economics, where researchers have recognized the importance of the subjective rating of happiness as a valuable and desirable outcome that is significantly correlated with other important outcomes, such as health (Steptoe, 2019) and productivity (DiMaria et al., 2020).

Broadly, happiness is a psychological state of being, typically researched and defined using psychological methods. We often measure it using self-report measures rather than objective measures that are less vulnerable to misinterpretation and error.

Including happiness in economics has opened up an entirely new avenue of research to explore the relationship between happiness and money.

Andrew Clark (2018) illustrates the variability in the term happiness economics with the following examples:

• Happiness can be a predictor variable, influencing our decisions and behaviors.
• Happiness might be the desired outcome, so understanding how and why some people are happier than others is essential.

However, the connection between our behavior and happiness must be better understood. Even though “being happy” is a desired outcome, people still make decisions that prevent them from becoming happier. For example, why do we choose to work more if our work does not make us happier? Why are we unhappy even if our basic needs are met?

An example of how happiness can influence decision-making

Sometimes, we might choose not to maximize a monetary or financial gain but place importance on other, more subjective outcomes.

To illustrate: If faced with two jobs — one that pays well but will bring no joy and another that pays less but will bring much joy — some people would prefer to maximize their happiness over financial gain.

If this decision were evaluated using a utility framework where the only valued outcomes were practical, then the decision would seem irrational. However, this scenario suggests that psychological outcomes, such as the experience of happiness, are as crucial as other socio-economic outcomes.

Economists recognize that subjective wellbeing , or happiness, is an essential characteristic and sometimes a desirable outcome that can motivate our decision-making.

In the last few decades, economics has shifted to include happiness as a measurable and vital part of general wellbeing (Graham, 2005).

The consequence is that typical economic questions now also look at the impact of employment, finances, and other economic metrics on the subjective rating and experience of happiness at individual and country levels.

Happiness is such a vital outcome in society and economic activity that it must be involved in policy making. The subjective measure of happiness is as important as other typical measures used in economics.

Many factors can contribute to happiness. In this post, we consider the role of money. The relationship between happiness, or subjective wellbeing, and money is assumed to be positive: More money means greater happiness.

However, the relationship between money and happiness is paradoxical: More money does not guarantee happiness (for an excellent review, see Graham, 2005).

Specifically, low levels of income are correlated with unhappiness. However, as our individual wealth increases and our basic needs are met, our needs change and differ in their importance.

Initially, our happiness is affected by absolute levels of income, but at a certain threshold, we place importance on relative levels of income. Knowing how we rank and compare to other people, in terms of wealth and material possession, influences our happiness.

The relationship between wealth and happiness continues to increase, but only to a certain point; at this stage, more wealth does not guarantee more happiness (Easterlin, 1974; Diener et al., 1993).

This may be at odds with our everyday lived experience. Most of us choose to work longer hours or multiple jobs so that we make more money. However, what is the point of doing this if money does not increase our happiness? Why do we seem to think that more money will make us happier?

History of the economics of happiness

The relationship between economics and happiness originated in the early 1970s. Brickman and Campbell (1971, as cited in Brickman et al., 1978) first argued that the typical outcomes of a successful life, such as wealth or income, had no impact on individual wellbeing.

Easterlin (1974) expanded these results and showed that although wealthier people tend to be happier than poor people in the same country, the average happiness levels within a country remained unchanged even as the country’s overall wealth increased.

The inconsistent relationship between happiness and income and its sensitivity to critical income thresholds make this topic so interesting.

There is some evidence that wealthier countries are happier than others, but only when comparing the wealthy with the poor (Easterlin, 1974; Graham, 2005).

As countries become wealthier, citizens report higher happiness, but this relationship is strongest when the starting point is poverty. Above a certain income threshold, happiness no longer increases (Diener et al., 1993).

Interestingly, people tend to agree on the amount of money needed to make them happy; but beyond a certain value, there is little increase in happiness (Haesevoets et al., 2022).

Measurement challenges

Measuring happiness accurately and reliably is challenging. Researchers disagree on what happiness means.

It is not the norm in economics to measure happiness by directly asking a participant how happy they are; instead, happiness is inferred through:

• Subjective wellbeing (Clark, 2018; Easterlin, 2004)
• A combination of happiness and life satisfaction (Bruni, 2007)

Furthermore, happiness can refer to an acute psychological state, such as feeling happy after a nice meal, or a lasting state similar to contentment (Nettle, 2005).

Researchers might use different definitions of happiness and ways to measure it, thus leading to contradictory results. For example, happiness might be used synonymously with subjective wellbeing and can refer to several things, including life satisfaction and financial satisfaction (Diener & Oishi, 2000).

It seems contradictory that wealthier nations are not happier overall than poorer nations and that increasing the wealth of poorer nations does not guarantee that their happiness will increase too. What could then be done to increase happiness?

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What is the relationship between income/wealth and happiness? To answer that question, we looked at studies to see where and how money improves happiness, but we’ll also consider the limitations to the positive effect of income.

Money buys access; jobs boost happiness

Overwhelming evidence shows that wealth is correlated with measures of wellbeing.

Wealthier people have access to better healthcare, education, and employment, which in turn results in higher life satisfaction (Helliwell et al., 2012). A certain amount of wealth is needed to meet basic needs, and satisfying these needs improves happiness (Veenhoven & Ehrhardt, 1995).

Increasing happiness through improved quality of life is highest for poor households, but this is explained by the starting point. Access to essential services improves the quality of life, and in turn, this improves measures of wellbeing.

Most people gain wealth through employment; however, it is not just wealth that improves happiness; instead, employment itself has an important association with happiness. Happiness and employment are also significantly correlated with each other (Helliwell et al., 2021).

Lockdown on happiness

The World Happiness Report (Helliwell et al., 2021) reports that unemployment increased during the COVID-19 pandemic, and this was accompanied by a marked decline in happiness and optimism.

The pandemic also changed how we evaluated certain aspects of our lives; for example, the relationship between income and happiness declined. After all, what is the use of money if you can’t spend it? In contrast, the association between happiness and having a partner increased (Helliwell et al., 2021).

Wealthier states smile more, but is it real?

If we took a snapshot of happiness and a country’s wealth, we would find that richer countries tend to have happier populations than poorer countries.

For example, based on the 2021 World Happiness Report, the top five happiest countries — which are also wealthy countries — are Finland, Iceland, Denmark, Switzerland, and the Netherlands (Helliwell et al., 2021).

In contrast, the unhappiest countries are those that tend to be emerging markets or have a lower gross domestic product (GDP), e.g., Zimbabwe, Tanzania, and India (Graham, 2005; Helliwell et al., 2021).

At face value, this makes sense: Poorer countries most likely have other factors associated with them, e.g., higher unemployment, more crime, and less political stability. So, based on this cross-sectional data, a country’s wealth and happiness levels appear to be correlated. However, over a more extended period, the relationship between happiness and GDP is nil (Easterlin, 2004).

That is, the subjective wellbeing of a population does not increase as a country becomes richer. Even though the wealth of various countries worldwide has increased over time, the overall happiness levels have not increased similarly or have remained static (Kahneman et al., 2006). This is known as a happiness–income paradox.

Easterlin (2004) posits four explanations for this finding:

• Societal and individual gains associated with increased wealth are concentrated among the extremely wealthy.
• Our degree of happiness is informed by how we compare to other people, and this relative comparison does not change as country-wide wealth increases.
• Happiness is not limited to only wealth and financial status, but is affected by other societal and political factors, such as crime, education, and trust in the government.
• Long-term satisfaction and contentment differ from short-term, acute happiness.

Kahneman et al. (2006) provide an alternative explanation centered on the method typically used by researchers. Specifically, they argue that the order of the questions asked to measure happiness and how these questions are worded have a focusing effect. Through the question, the participant’s attention to their happiness is sharpened — like a lens in a camera — and their happiness needs to be over- or underestimated.

Kahneman et al. (2006) also point out that job advancements like a raise or a promotion are often accompanied by an increase in salary and work hours. Consequently, high-paying jobs often result in less leisure time available to spend with family or on hobbies and can cause more unhappiness.

Not all that glitters is gold

Extensive research explored whether a sudden financial windfall was associated with a spike in happiness (e.g., Sherman et al., 2020). The findings were mixed. Sometimes, having more money is associated with increased life satisfaction and improved physical and mental health.

This boost in happiness, however, is not guaranteed, nor is it long. Sometimes, individuals even wish it had never happened (Brickman et al., 1978; Sherman et al., 2020).

Consider lottery winners. These people win sizable sums of money — typically more extensive than a salary increase — large enough to impact their lives significantly. Despite this, research has consistently shown that although lottery winners report higher immediate, short-term happiness, they do not experience higher long-term happiness (Sherman et al., 2020).

Here are some reasons for this:

• Previous everyday activities and experiences become less enjoyable when compared to a unique, unusual experience like winning the lottery.
• People habituate to their new lifestyle.
• A sudden increase in wealth can disrupt social relationships among friends and family members.
• Work and hobbies typically give us small nuggets of joy over a more extended period (Csikszentmihalyi et al., 2005). These activities can lose their meaning over a longer period, resulting in more unhappiness (Sherman et al., 2020; Brickman et al., 1978).

Sherman et al. (2020) further argue that lottery winners who decide to quit their job after winning, but do not fill this newly available time with some type of meaningful hobby or interest, are also more likely to become unhappy.

Passive activities do not provide the same happiness as work or hobbies. Instead, if lottery winners continue to take part in activities that give them meaning and require active engagement, then they can avoid further unhappiness.

Happiness: Is it temperature or climate?

Like most psychological research, part of the challenge is clearly defining the topic of investigation — a task made more daunting when the topic falls within two very different fields.

Nettle (2005) describes happiness as a three-tiered concept, ranging from short-lived but intense on one end of the spectrum to more abstract and deep on the other.

The first tier refers to transitory feelings of joy, like when one opens up a birthday present.

The second tier describes judgments about feelings, such as feeling satisfied with your job. The third tier is more complex and refers to life satisfaction.

Across research, different definitions are used: Participants are asked about feelings of (immediate) joy, overall life satisfaction, moments of happiness or satisfaction, and mental wellbeing . The concepts are similar but not identical, thus influencing the results.

Most books on happiness economics are textbooks. Although no doubt very interesting, they’re not the easy-reading books we prefer to recommend.

Instead, below you will find a range of books written by economists that explore happiness. These should provide a good springboard on the overall topic of happiness and what influences it, in case any of our readers want to pick up a more in-depth textbook afterward.

If you have a happiness book you would recommend, please let us know in the comments section.

1. Happiness: Lessons from a New Science – Richard Layard

Richard Layard, a lead economist based in London, explores in his book if and how money can affect happiness.

Layard does an excellent job of introducing topics from various fields and framing them appropriately for the reader.

The book is aimed at readers from varying academic and professional backgrounds, so no experience is needed to enjoy it.

Find the book on Amazon .

2. Happiness by Design: Change What You Do, Not How You Think – Paul Dolan

This book has a more practical spin. The author explains how we can use existing research and theories to make small changes to increase our happiness.

Paul Dolan’s primary thesis is that practical things will have a bigger effect than abstract methods, and we should change our behavior rather than our thinking.

The book is a quick read (airport-perfect!), and Daniel Kahneman penned the foreword.

3. The Psychology of Money: Timeless Lessons on Wealth, Greed and Happiness – Morgan Housel

This book is not necessarily about happiness economics, but it is close enough to the overall theme that it is worth mentioning.

Since most people are concerned with making more money, this book helps teach the reader why we make the decisions we do and how we make better decisions about our money.

This book is a worthwhile addition to any bookcase if you are interested in the relationship between finances and psychology in general.

4. Happiness: The Science Behind Your Smile – Daniel Nettle

If you are interested in happiness overall, then we recommend Happiness: The Science Behind Your Smile by Daniel Nettle, a professor of behavioral science at Newcastle University.

In this book, he takes a scientific approach to explaining happiness, starting with an in-depth exploration of the definition of happiness and some of its challenges.

The research that he presents comes from various fields, including social sciences, medicine, neurobiology, and economics.

Because of its small size, this book is perfect for a weekend away or to read on a plane.

5 & 6. Prefer to listen rather than read?

One of our favorite podcasts is Intelligence2, where leading experts in a particular field gather to debate a particular topic.

This show’s host, Dr. Laurie Santos, argues that we can increase our happiness by not hoarding our money for ourselves but by giving it to others instead. If you are interested in this episode , or any of the other episodes in the Happiness Lab podcast series, then head on over to their page.

There are several resources available at PositivePsychology.com for our readers to use in their professional and personal development.

In this section, you’ll find a few that should supplement any work on happiness and economics. Since the undercurrent of the topic is whether happiness can be improved through wealth, a few resources look at happiness overall.

Valued Living Masterclass

Although knowledge is power, knowing that money does not guarantee happiness does not mean that clients will suddenly feel fulfilled and satisfied with their lives.

For this reason, we recommend the Valued Living Masterclass , for professionals to help their clients find meaning in their lives. Rather than keeping up with the Joneses or chasing a high-paying job, professionals can help their clients connect with their inner meaning (i.e., their why ) as a way to find meaning and gain happiness.

Three free exercises

If you want to try it out before committing, look at the Meaning & Valued Living exercise pack , which includes three exercises for free.

Recommended reading

Read our post on Success Versus Happiness for further information on balancing happiness with success, in any domain . This topic is poignant for readers who conflate happiness and success, and will guide readers to better understand their relationship and how the two terms influence each other.

For readers who wonder about altruism , you would find it interesting that rather than hoarding, you can increase your happiness through volunteering and donating. In this post, the author, Dr. Jeremy Sutton, does a fabulous job of approaching altruism from various fields and provides excellent resources for further reading and real-life application.

Our last recommendation is for readers who want to know more about measuring subjective wellbeing and happiness . The post lists various tests and apps that can measure happiness and the overall history of how happiness was measured and defined. This is a good starting point for researchers or clinicians who want to explore happiness economics professionally.

17 Happines Exercises

If you’re looking for more science-based ways to help others develop strategies to boost their wellbeing, this collection contains 17 validated happiness and wellbeing exercises . Use them to help others pursue authentic happiness and work toward a  life filled with purpose and meaning

17 Exercises To Increase Happiness and Wellbeing

Add these 17 Happiness & Subjective Well-Being Exercises [PDF] to your toolkit and help others experience greater purpose, meaning, and positive emotions.

Created by Experts. 100% Science-based.

As you’ve seen in our article, the evidence overwhelmingly clarifies that money does not guarantee more happiness … well, long-term happiness.

Our happiness is relative since we compare ourselves to other people, and over time, as we become accustomed to our wealth, we lose all the happiness gains we made.

Money can ease financial and social difficulties; consequently, it can drastically improve people’s living conditions, life expectancy, and education.

Improvements in these outcomes have a knock-on effect on the overall experience of one’s life and the opportunities for one’s family and children. Nevertheless, better opportunities do not guarantee happiness.

Our intention with this post was to illustrate some complexities surrounding the relationship between money and happiness.

Knowing that money does not guarantee happiness, we recommend less expensive methods to improve one’s happiness:

• Spend time with friends.
• Cultivate hobbies and interests.
• Stay active and eat healthy.
• Try to live a meaningful life.
• Give some love (go smooch your partner or tickle your dog’s belly).

Diamonds might be a girl’s best friend, but money is a fair weather one, at best.

We hope you enjoyed reading this article. Don’t forget to download our three Happiness Exercises for free .

• Brickman, P., Coates, D., & Janoff-Bulman, R. (1978). Lottery winners and accident victims: Is happiness relative? Journal of Personality and Social Psychology , 36 (8), 917.
• Bruni, L. (2007). Handbook on the economics of happiness . Edward Elgar.
• Clark, A. E. (2018). Four decades of the economics of happiness: Where next? Review of Income and Wealth , 64 (2), 245–269.
• Csikszentmihalyi, M., Abuhamdeh, S., & Nakamura, J. (2005). Flow. In A. J. Elliot & C. S. Dweck (Eds.), Handbook of competence and motivation (pp. 598–608). Guilford Publications.
• Diener, E., Sandvik, E., Seidlitz, L., & Diener, M. (1993). The relationship between income and subjective well-being: Relative or absolute? Social Indicators Research , 28 , 195–223.
• Diener, E., & Oishi, S. (2000). Money and happiness: Income and subjective well-being across nations. Culture and Subjective Well-Being , 185 , 218.
• DiMaria, C. H., Peroni, C., & Sarracino, F. (2020). Happiness matters: Productivity gains from subjective well-being. Journal of Happiness Studies , 21 (1), 139–160.
• Easterlin, R. A. (1974). Does economic growth improve the human lot? Some empirical evidence. In P. A. David & M. W. Reder (Eds.), Nations and households in economic growth: Essays in honor of Moses Abramovitz (pp. 89–125). Academic Press.
• Easterlin, R. A. (2004). The economics of happiness. Daedalus , 133 (2), 26–33.
• Graham, C. (2005). The economics of happiness. World Economics , 6 (3), 41–55.
• Haesevoets, T., Dierckx, K., & Van Hiel, A. (2022). Do people believe that you can have too much money? The relationship between hypothetical lottery wins and expected happiness. Judgment and Decision Making , 17 (6), 1229–1254.
• Helliwell, J., Layard, R., & Sachs, J. (Eds.) (2012). World happiness report . The Earth Institute, Columbia University.
• Helliwell, J. F., Layard, R., Sachs, J. D., & Neve, J. E. D. (2021). World happiness report 2021 .
• Kahneman, D., Krueger, A. B., Schkade, D., Schwarz, N., & Stone, A. A. (2006). Would you be happier if you were richer? A focusing illusion. Science , 312 (5782), 1908–1910.
• Nettle, D. (2005). Happiness: The science behind your smile . Oxford University Press.
• Sherman, A., Shavit, T., & Barokas, G. (2020). A dynamic model on happiness and exogenous wealth shock: The case of lottery winners. Journal of Happiness Studies , 21 , 117–137.
• Steptoe, A. (2019). Happiness and health. Annual Review of Public Health , 40 , 339–359.
• Veenhoven, R., & Ehrhardt, J. (1995). The cross-national pattern of happiness: Test of predictions implied in three theories of happiness. Social Indicators Research , 34 , 33–68.

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Does Money Buy Happiness? Essay

Whether or not money can buy happiness is a continued debate. Billions of people in all parts of the world sacrifice their ambitions and subconscious tensions on the altar of profitability and higher incomes. Millions of people dream to achieve the level of wellbeing, when earning money will no longer be a problem to them. Legal or illegal does not really matter, as long as these strategies lead individuals to the desired monetary outcomes.

Professional economists assert that more money does not buy happiness. As a result, it makes no sense for people to pursue money. Yet, the reality is quite different, as money, wealth, high incomes, and wide opportunities which they open make people extremely satisfied. Based on the current knowledge of economics, the opportunity costs of pursuing money can be extremely high. Therefore, it is better to pursue money for a purpose rather than for its own sake.

People always wanted more money. Money inspired professional economists and bank robbers. Millions of people would even try to sell their souls for a reasonable sum of money. Nevertheless, the debate on whether or not money can buy happiness continues to persist. Globalization and consumerism have turned money into the main criterion of individual and professional success: the more money you earn the better person you are.

However, professional economists suggest that money does not make people happy. The current state of research claims that, despite the rapid increase in personal incomes, the percentage of people who consider themselves happy has not changed (Lee, 2005). Similar disconnects between income and happiness were found in most advanced economies, including Japan, Europe, and the United Kingdom (Lee, 2005).

However, the general inconsistency of these research results is too obvious to ignore. First, what does it mean for people to be happy? Professional economists may have profound knowledge of economic concepts but can hardly make happiness measurable. Second, can people be happy with their incomes if they always want more? Most probably, at any given point, individuals will feel dissatisfied with what they have and will try to obtain more.

I agree that money buys happiness, but this happiness is never constant. This idea is further supported by Lee (2005), who assumes that people will make all sorts of sacrifices to get money, but their happiness will be temporary at best. Lee (2005) relies on the two main premises.

First, “happiness people realize from having more income results from having more relative to others in some reference group, not from having more absolutely” (p.389). Simply stated, individuals always compare their incomes and positions to those of other individuals. They want to have more relative to what others have or can have. However, their happiness wanes as soon as others achieve a better social position, income, or level of wellbeing.

Second, the nature of sensory adaptation in humans explains why people are never happy with what they have: human receptors become irresponsive to the continuous presence of one and the same stimulus (Lee, 2005). As a result, the more money individuals earn the happier they become; however, with time, money turns into boredom and no longer brings happiness.

Obviously, it does make sense to make money, since money is the main instrument of exchange and the source of unlimited opportunities for everyone. Money opens the gateway to a broad range of material and nonmaterial values, including health and education.

We should never belittle the significance of money merely because it brings only temporary satisfaction (Lee, 2005). Yet, it is always better to pursue money for a purpose rather than for its own sake. Money for the sake of money makes little sense. Money is not the end but only the means of achieving some goal, like purchasing a new house or curing a sick child.

Moreover, a common increase in individual wealth is always a positive externality, as richer countries experience lower childbirth mortality, fewer traffic deaths, better health, and longer life expectancy (Lee, 2005). We live in society and our wealth necessarily benefits others, through taxes and charity. Therefore, it always makes sense to pursue money to improve individual and societal wellbeing.

The opportunity costs of pursuing more money can be extremely high. Opportunity costs are everywhere, as every decision necessarily involves tradeoffs. Individuals sacrifice their families and personal wellbeing to become successful, rich professionals. Others apply to illegal activities and decisions to earn their wealth. In my own life, my decision to become educated was associated with major opportunity costs. First, the costs of education impose a heavy burden of financial obligations on me.

I could use this money to meet other life goals. Second, I spend more time at work and earn more money; I lose considerable earnings each time I pursue a better grade. Third, not all courses are equally pleasant: some courses seem not to be tailored to the specific needs and demands of the student majority (Frank, 2005). I could use this time to improve my knowledge of the disciplines that are important for my future career. To a large extent, the dollar cost of education does not reflect all opportunity costs.

Yet, many students forget that higher education provides a variety of benefits that helps to decrease most, if not, opportunity costs. Statistically, college and university graduates earn $14,000 a year more compared with their non-educated counterparts (Anonymous, 2003). The social value of higher education is difficult to underestimate (Porter, 2002). Education enhances workplace productivity and stimulates professional growth. Therefore, the marginal utility of a university degree increases.

Almost all economists treat opportunity cost as the main economic concept (Frank, 2005). Every single decision is inevitably associated with one or more opportunity costs. These involve explicit and implicit costs of other opportunities (Arnold, 2008; Baumol & Blinder, 2008). Opportunity costs reflect the significance of the cost-benefit principle that governs most individual decisions (Frank, 2005). Introductory economics courses must place particular emphasis on teaching students how to weigh benefits and costs of various decisions (Frank, 2005). This knowledge of economics and economic principles will subsequently reduce the opportunity costs of education.

Whether or not money can buy happiness is a continued debate. Billions of people in all parts of the world sacrifice their ambitions and subconscious tensions on the altar of profitability and higher incomes. The current state of research claims that, despite the rapid increase in personal incomes, the percentage of people who consider themselves happy has not changed.

However, these results do not reflect the real order of things in the world. Money buys happiness, but this happiness is never constant. The more money individuals earn the happier they become; however, with time, money turns into boredom and no longer brings happiness.

Moreover, a common increase in individual wealth is always a positive externality, as richer countries experience lower childbirth mortality, fewer traffic deaths, better health, and longer life expectancy. Yet, the opportunity costs of pursuing more money can be extremely high. Every single decision is inevitably associated with one or more opportunity costs. Knowledge of economics and economic principles will subsequently reduce the opportunity costs of education.

Anonymous. (2003). Report puts dollar value on education. Georgia College & State University. Web.

Arnold, R.A. (2008). Microeconomics. Boston: Cengage Learning.

Baumol, W.J. & Blinder, A.S. (2008). Microeconomics: Principles and policy. Boston: Cengage Learning.

Frank, R.H. (2005). The opportunity cost of economics education . The New York Times. Web.

Lee, D.R. (2005). Who says money cannot buy happiness? The Independent Review, X(3), 385-400.

Porter, K. (2002). The value of a college degree. ERIC Digest. Web.

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Essay Papers Writing Online

The relationship between wealth and happiness – exploring the impact of money on life satisfaction.

Money and happiness have long been subjects of debate and speculation. Many people believe that money can buy happiness, while others argue that true happiness comes from within. But what is the real relationship between money and happiness?

Recent studies have shown that there is indeed a correlation between income and happiness, up to a certain point. Having enough money to meet basic needs and live comfortably can contribute to an individual’s overall happiness and wellbeing.

However, once a person’s basic needs are met, the relationship between money and happiness becomes more complex. Factors such as personal relationships, health, and a sense of purpose play a significant role in determining a person’s happiness levels.

So, while money can contribute to happiness to a certain extent, it is not the sole determinant of one’s overall well-being. Finding a balance between financial stability and other sources of happiness is key to leading a fulfilling and content life.

The Relationship Between Money and Happiness

Money and happiness have long been linked together, sparking debates and discussions on whether money truly buys happiness. While it is true that money can provide a sense of security and comfort, studies have shown that beyond a certain income level, the correlation between money and happiness diminishes.

Quality of Life: Research suggests that money can improve quality of life up to a certain point where basic needs are met. Ensuring access to necessities such as food, shelter, and healthcare can contribute to overall happiness.

Fulfillment: Money can also provide opportunities for personal growth and fulfillment. Investing in experiences, hobbies, or education can lead to a sense of accomplishment and satisfaction.

Social Connections: While money can enable social interactions and connections, it is the quality of relationships rather than the quantity that plays a crucial role in happiness. Spending time with loved ones and forming meaningful relationships, regardless of financial status, can be a key factor in overall well-being.

In conclusion, while money can contribute to happiness, it is not the sole determinant. True happiness stems from a balance of financial stability, personal fulfillment, and meaningful relationships.

Exploring the Question

Does money buy happiness.

The relationship between money and happiness is a complex and controversial topic that has long intrigued researchers and philosophers alike. While many believe that financial wealth can lead to greater happiness and overall well-being, others argue that true happiness stems from non-material factors such as relationships, experiences, and personal fulfillment.

Studies have shown that there is a correlation between income and happiness up to a certain point, beyond which the impact of money on happiness diminishes. While having enough money to meet basic needs and have a comfortable lifestyle is crucial for happiness, extravagant wealth may not guarantee lasting fulfillment.

Furthermore, research suggests that spending money on experiences rather than material possessions can lead to greater happiness. Experiences like travel, cultural activities, and time spent with loved ones have been shown to contribute more to overall well-being than the accumulation of material goods.

In conclusion, while money can certainly contribute to happiness to a certain extent, it is not the sole determinant of one’s emotional well-being. Exploring the question of whether money buys happiness involves considering the complex interplay between financial resources, personal values, and the pursuit of meaningful experiences in life.

When it comes to the age-old question of whether money can buy happiness, the answer is not as straightforward as one might think. While money can certainly provide comfort and security, its ability to bring long-lasting happiness is debatable. Research has shown that once basic needs are met, additional wealth does not necessarily lead to increased levels of happiness. In fact, studies have found that the correlation between money and happiness tends to diminish beyond a certain income threshold.

One reason for this phenomenon is the concept of adaptation. People have a tendency to adapt to their circumstances, including their income level, which means that a sudden increase in wealth may provide a temporary boost in happiness, but that boost is likely to fade over time as individuals get accustomed to their new financial status.

Furthermore, the pursuit of money can sometimes come at the expense of other aspects of life that are more closely tied to happiness, such as meaningful relationships, personal growth, and work satisfaction. In this sense, the relationship between money and happiness is complex and multifaceted, with various factors contributing to an individual’s overall sense of well-being.

While money can certainly contribute to happiness by meeting basic needs and providing a sense of security, its ability to buy lasting happiness is limited. Ultimately, true happiness may be found not in material wealth, but in the intangible aspects of life that bring fulfillment and meaning.

Impact of Income on Well-Being

Research suggests that income can have a significant impact on an individual’s sense of well-being. While money alone may not buy happiness, it can provide access to resources and opportunities that contribute to overall well-being.

Higher income levels are often associated with better health outcomes, improved access to education and healthcare, and a higher standard of living. This can lead to reduced stress levels and a greater sense of security and stability in life.

However, the relationship between income and well-being is complex and multifaceted. Factors such as individual values, social connections, and personal fulfillment also play a crucial role in determining one’s overall happiness and satisfaction with life.

It is important to recognize that while money can certainly impact well-being, it is not the sole determinant of happiness. Ultimately, a balanced approach that takes into account various aspects of life, including relationships, personal growth, and community involvement, is essential for achieving true well-being and fulfillment.

Psychological Aspects of Wealth

Understanding the psychological aspects of wealth is crucial when exploring the relationship between money and happiness. Studies have shown that the pursuit of wealth can have both positive and negative effects on an individual’s well-being.

On one hand, having financial security can alleviate stress and provide a sense of stability, leading to increased happiness. However, the relentless pursuit of wealth at the expense of other aspects of life, such as relationships and personal growth, can lead to feelings of emptiness and dissatisfaction.

It is important to strike a balance between financial success and overall well-being, recognizing that true happiness comes from a combination of financial security, fulfilling relationships, personal growth, and a sense of purpose.

Material Possessions vs Experiences

When it comes to finding happiness, many people often debate whether material possessions or experiences contribute more to one’s overall well-being.

While material possessions such as a new car, a designer bag, or the latest smartphone can bring temporary joy, studies have shown that experiences tend to have a more lasting impact on our happiness.

Experiences like traveling to new places, trying new activities, or spending quality time with loved ones create lasting memories that can bring us joy and fulfillment long after the moment has passed.

These experiences are unique to us and contribute to our sense of identity and personal growth, enhancing our overall well-being in the long run.

So, while material possessions may provide instant gratification, it is often the experiences we have and the memories we create that truly enrich our lives and bring us lasting happiness.

Strategies for Finding Balance

1. Prioritize experiences over possessions: Instead of focusing on acquiring more money and material things, prioritize experiences that bring joy and fulfillment. Engaging in activities that create lasting memories and meaningful connections with loved ones can contribute more to your overall happiness than material possessions.

2. Practice gratitude: Cultivate a sense of gratitude for the things you already have in your life. By appreciating the simple pleasures and blessings, you can find contentment and satisfaction without constantly chasing after more wealth.

3. Set boundaries with work: Strive to create a balance between work and personal life by setting clear boundaries. Make time for activities that recharge you and bring you joy, and avoid letting work consume all your time and energy.

4. Focus on personal growth: Invest in your own personal development and growth, as true happiness often comes from a sense of progress and accomplishment. Pursue hobbies, interests, and goals that bring you fulfillment and help you grow as an individual.

5. Practice mindfulness: Stay present in the moment and focus on the here and now, rather than getting caught up in worries about the future or regrets about the past. Mindfulness can help you appreciate the present moment and find inner peace and contentment.

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Essay on Money And Happiness

Students are often asked to write an essay on Money And Happiness in their schools and colleges. And if you’re also looking for the same, we have created 100-word, 250-word, and 500-word essays on the topic.

Let’s take a look…

100 Words Essay on Money And Happiness

Understanding money.

Money is like the coins and notes we use to buy things. It’s important because it helps us get what we need, like food and a place to live. People work to earn money, and they use it to pay for goods and services.

Can Money Buy Happiness?

Some people think having a lot of money makes you happy. It can buy toys, games, and vacations. But happiness isn’t just about things you can buy. It’s also about love, friendship, and good memories.

Happiness Without Money

True happiness often comes from non-money things like playing with friends, family hugs, and laughing. These moments create joy that lasts longer than the happiness from buying something.

Balance is Key

It’s good to have money for what we need. But it’s also important to enjoy simple pleasures. Finding a balance between money and happiness is like having enough ice cream: too little is sad, but too much can also make you sick.

250 Words Essay on Money And Happiness

Money’s role in happiness.

Many people believe that having a lot of money can make them happy. It’s true that money can buy things we need and want. With enough money, we can have a comfortable house, good food, and fun toys. It also lets us do things like travel and go to movies, which can make us feel joyful.

But Does Money Guarantee Happiness?

The answer is not so simple. After we have enough money for basic needs, extra money doesn’t always mean extra happiness. Think about it like a favorite dessert: the first bite is delicious, but after a while, you can’t eat anymore. Similarly, once we have enough money, more of it doesn’t make us much happier.

Other Important Things for Happiness

Happiness isn’t just about money. It’s also about having friends, family, and good health. Playing with friends, spending time with family, and running around outside can make us very happy. These things don’t need a lot of money but are very valuable for our happiness.

Money as a Tool

We should think of money as a tool. It can help us get things that make life easier and more fun. But it’s not the only thing that creates happiness. Being kind, having good relationships, and enjoying simple pleasures are also key to feeling happy.

In conclusion, money can help with happiness, but it’s not the whole story. Being with loved ones and taking care of our health are just as important. Remember, smiles are free, and often, they are the best sign of happiness.

500 Words Essay on Money And Happiness

Understanding money and happiness.

Many people talk about how important money is, and others say happiness is the key to life. But what is the real connection between money and being happy? This essay will explore the relationship between these two things in a simple way.

Money is like a tool, something you use to buy things you need or want. Just like a hammer helps you build a house, money helps you get food, a place to live, clothes, and toys. It’s easy to think that having more money means you can buy more things, and that will make you happier. To some extent, this is true because if you don’t have enough money for basic needs, life can be very hard and stressful.

Happiness Beyond Basics

Once you have enough money for the basics, like food and a safe home, having extra money doesn’t always make you a lot happier. This is because happiness often comes from things that you can’t buy with money. For example, spending time with family and friends, playing outside, and doing things you love can make you feel happy, and they don’t always need money.

The Limits of Money

Even though money can buy lots of things, it can’t buy everything. For example, money can’t buy love or friendship. You can’t use money to make someone care about you or to have a true friend. Also, if you focus too much on getting money, you might miss out on fun times with people you care about.

Being Wise with Money

Being smart about how you use money is important. If you only buy things you really need or that will truly make you happy, you can save your money for important things in the future, like education or adventures. Also, sharing your money by helping others can make you feel good inside, which is a special kind of happiness.

Money Can’t Solve Everything

Sometimes, no matter how much money you have, there are problems that money can’t fix. If you’re feeling sad or have a problem with a friend, buying something new might make you feel better for a little while, but it won’t fix the real problem. Talking to someone you trust, like a parent or teacher, can help more than spending money.

Finding Balance

The secret is finding a balance between having enough money to take care of your needs and finding happiness in things that don’t cost money. It’s like having a cake – money can buy the ingredients, but the fun of baking and eating it with friends is where the real happiness is.

In the end, money is important because it helps us live comfortably and gives us a chance to do things we enjoy. But it’s not the only thing that makes us happy. Real happiness often comes from love, friendship, and doing things that make us feel proud and excited. So, while money is a helpful tool, it’s not the only path to happiness. Remember, the best things in life aren’t things you can buy, but moments you share with others and experiences that make you smile.

That’s it! I hope the essay helped you.

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Home — Essay Samples — Economics — Money — Money and Happiness: Can Money Buy Happiness

Money and Happiness: Can Money Buy Happiness

• Categories: Happiness Money

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Published: Feb 8, 2022

Words: 1862 | Pages: 4 | 10 min read

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Introduction, works cited.

• Clark, A. E. (2006). Born to be mild? Cohort effects don’t (fully) explain why well-being is U-shaped in age. Paris-Jourdan Sciences Economiques.
• Donnelly, G., & Norton, M. (2018). The Happiness of Millionaires. Harvard Business Review.
• Easterlin, R. A. (2016). Happiness and economic growth: the evidence. Discussion Paper No. 869.
• Finkelstein, J. (2008). If You’re Richer, You’re Happier. The New York Times.
• Leonhardt, D. (2008). Maybe Money Does Buy Happiness After All. The New York Times.
• Luhmann, M., & Schimmack, U. (2021). Objective well-being and the ABCs of misery: A review of research on the affective, behavioral, and cognitive consequences of low levels of subjective well-being. Social Science & Medicine, 270, 113682.
• Lyubomirsky, S., Sheldon, K. M., & Schkade, D. (2005). Pursuing happiness: The architecture of sustainable change. Review of general psychology, 9(2), 111-131.
• Veenhoven, R. (1997). Advances in understanding happiness. Revue Québécoise de Psychologie, 18(2), 29-74.
• Watson, D. (2019). Why money can’t buy happiness. Forbes.
• Wrzesniewski, A., McCauley, C., Rozin, P., & Schwartz, B. (1997). Jobs, careers, and callings: People’s relations to their work. Journal of research in Personality, 31(1), 21-33.

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Essay on Money and Happiness

Introduction

Money is an aspect that determines one’s happiness in different circumstances, depending on what it does to one. The wellbeing of an individual is typically associated with his/her happiness. Money is a means of exchange and can be used to make individuals happy upon expenditure (Yıldız, 2016). For instance, one can use money to raise his/her standards of living to a level that satisfies them. Various communities in the world have different lifestyles that are adored by most members of the society. It is essential to examine the relationship between money and happiness among members of the society. Money makes life easy by providing basics that are important for happiness and satisfaction (Yıldız, 2016). For instance, one can use money to buy medicine, educate people, and even create a serene environment for relaxation. Such aspects make money have an attachment to happiness. However, it is not necessarily true that money brings joy in an individual as it leads to crime and insecurity.

Problem Statement

Happiness is essential even amongst employees of any company as it can ensure the retention of top skilled staff. In most situations, when people are accorded high pay and other monetary related rewards, they tend to do better in their operations. Equally, individuals living in abject poverty might lack the necessary resources to obtain basics that are meant for survival. As for the rich, one can buy anything that makes them happy at whatever price (D’Ambrosio, Jäntti & Lepinteur, 2019). The fact that money evokes a spirit of happiness in many individuals is true even though it makes some to cry in the end. The study explores the role of money in making people happy or sad in life. It is also important to note that some people re happy even though they do not have much money or richness with them.

Happiness implies a situation where one’s life is good and that the individuals are comfortable with the state of life. Materialistic aspects within the society support happiness, and money is one significant material factor. It is through money that families go on holiday to have fun with their loved ones (D’Ambrosio, Jäntti & Lepinteur, 2019). People within the society have different perceptions of money and what it does to make one happy. A background check on the topic of discussion will be necessary to establish facts that other researchers have presented in regards to money and happiness.

The study seeks to explore the role of money in boosting happiness within the society.

Supporting Evidence

Money makes life comfortable when spending fits one’s personality according to research conducted by Matz, Gladstone, and Stillwell. In the year 2016, the research echoed the role of money in providing the necessary support in life to make one happy. Money buys food for everyone, and lack of enough of it can make one go hungry (Matz, Gladstone & Stillwell, 2016). For instance, some individuals suffer from conditions that require the taking of specified meals. Such meals are expensive, making it hard for many people to manage without enough money. Most people who live in poverty cannot finance healthy meals three times a day. Eating a meal of choice is essential to each individual within the society, which is a source of happiness. Money has a close relationship with happiness as it provides meals of choice (Muresan, Ciumas & Achim, 2019). When one wants to take a specific meal, they can purchase the food by using money. Money is an essential element for nurturing a well-fed and happy society.

The second aspect that makes money important in creating happiness is the fact that it can deliver a serene environment. With money, an individual creates and modifies the environment to suit preferences and tastes. Hotels and resorts make money from creating cool environments for vacation and relaxing (Mogilner & Norton, 2016). Such environments are expensive and meant for the rich in society, creating a notion that money is the sole source of happiness. Spending the right way during vacation is a source of happiness for many, making money a significant factor for anyone on holiday. A serene environment allows one to relax and reflect on personal issues that are affecting one’s life. Equally, money enables one to construct a self-contained homestead with the features of preference put in place. Money is an essential aspect as it enables one to purchase construction materials for the building of a home (Mogilner & Norton, 2016). Individuals with enough of the resources end up constructing beautiful homes that spark a feeling of happiness among the residents.

Some diseases require money to heal as the medicine involved is expensive. Chronic diseases are expensive to handle, and the vulnerable in society might not be in a position to handle outbreaks due to the expensive procedures involved (Mogilner & Norton, 2016). For instance, cancer is an issue that has plagued many poor societies as the drugs for treatment are expensive for the poor. As such, with a limited amount of money, one might fail to access the necessary care meant to cure a specific condition. In the event, family members are denied happiness as such cases end up fatal (Bartolini, Mikucka & Sarracino, 2017). Money is a critical aspect that can help fight deadly diseases, especially when the therapy involved and drugs are expensive. When n individual lacks enough resources to go for medical care, there is a likelihood that they will pass on, which deprives family members of their happiness (Bartolini, Mikucka & Sarracino, 2017). It is important to examine the role of money in helping fight chronic diseases and other deadly outbreaks within the society.

Money has promoted education and civilization in various societies on a global front. It is through money that one can access quality education to transform the society. People from poor backgrounds are disadvantaged for the lack of enough resources to provide the required education. The rich have the opportunity to educate their children in international institutions that nurture talent and professionalism (Bartolini, Mikucka & Sarracino, 2017). The poor do not get the opportunity to quality education, a factor widening the rift between the rich and the poor. Through quality education, an individual gains satisfaction, which is a prerequisite for happiness among many.

Refuting Argument

Money is not the source of happiness in the world s some could argue. This is because money has made many lose their lives in the event of looking for money. The existence of the rich and the poor within the society is an indication that money is not everything. Crime cases have gone up due to the love of money. Happiness can arise from within, and one does not have to be rich to enjoy life (Muresan, Ciumas & Achim, 2019). The love for money has made many people commit crimes in the name of searching for money. As such, one can presume that money is the source of the high crime rates experienced in many countries. Criminals cannot stop at anything until they obtain money illegally from an individual. Happiness can be obtained through inner satisfaction on various matters(Muresan, Ciumas & Achim, 2019)It does not have to be money that is used to make one comfortable.

The love for money has escalated to another level to the extent of a society losing its morality. People are concerned with looking for money as a source of happiness, even though they end up being frustrated. There are many individuals across the world with purchasing power, however, the money does not deliver the desired happiness. The society has lost moral standards due to the increased evils associated with money (Muresan, Ciumas & Achim, 2019). People go as far as killing for money, a factor that depicts the society as eroded with ethical values. Money has led to the erosion of humanity, which has bred hatred and unwanted conflicts within the society. Money should not be seen as the source of happiness but can be used to make one comfortable.

To sum it up, money and happiness are two aspects that are interrelated as one provides more comfort. It is important to examine various ways that many can create happiness within an individual. Money enables individuals to buy food, accommodation, drugs, and fund educational activities within the society. In the event, one meets his/her needs using money, which is a significant factor in sparkling happiness. However, the love of money has been the source of all evil, including crime, corruption, and embezzlement of funds. Money sparks happiness but does not guarantee happiness for anyone within the society.

Bartolini, S., Mikucka, M., & Sarracino, F. (2017). Money, trust and happiness in transition countries: evidence from time series.  Social indicators research ,  130 (1), 87-106.

D’Ambrosio, C., Jäntti, M., & Lepinteur, A. (2019). Money and Happiness: Income, Wealth and Subjective Well-being.  Social Indicators Research , 1-20.

Matz, S. C., Gladstone, J. J., & Stillwell, D. (2016). Money buys happiness when spending fits our personality.  Psychological science ,  27 (5), 715-725.

Mogilner, C., & Norton, M. I. (2016). Time, money, and happiness.  Current Opinion in Psychology ,  10 , 12-16.

Muresan, G. M., Ciumas, C., & Achim, M. V. (2019). Can money buy happiness? Evidence for European Countries.  Applied Research in Quality of Life , 1-18.

Yıldız, H. (2016). The Relation between Money and Happiness in MENA Countries. In  Comparative Political and Economic Perspectives on the MENA Region  (pp. 111-124). IGI Global.

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Greater Good Science Center • Magazine • In Action • In Education

Can Money Buy Happiness? It Depends on Why You’re Spending It

Imagine that someone gives you a cash gift and tells you that, instead of saving or investing it, you need to spend it right now. What should you put your money toward if you want to make yourself happiest?

According to past research , we’ll be happier if we spend money on an experience than if we buy a material object—like traveling or going out for a meal instead of buying the latest product we see on social media. For example, people report more gratitude when they spend on experiences rather than possessions.

On the other hand, we can all probably think of times when we’ve spent money on an experience that ended up not being worth it. Maybe you bought pricey event tickets to avoid missing out, only to realize on the day of the event that you’d much prefer a cozy night at home. Or perhaps you went out to dinner with a friend at a fancy restaurant, only to find that your friend was more focused on posting the meal to Instagram than having a deep conversation.

It turns out that there might be another factor at play beyond whether we spend money on an experience or a material item: According to a new study published in the British Journal of Social Psychology , it may also matter how our purchases align with our goals.

In the study, researchers asked 452 participants in an online survey to describe a recent purchase. They were asked to write about something they had spent money on in the last three months (ranging from about $60 to $1,200), excluding everyday expenses such as bills and groceries. After describing it, people were asked to indicate the extent to which the purchase helped to fulfill different goals. They also noted how much they felt the purchase contributed to their happiness and life satisfaction.

According to self-determination theory , goals reflect our intrinsic and extrinsic motivations. Extrinsic goals are things that other people expect for us: for example, working hard at a job not because you’re passionate about the work, but because you need the money or want a high-status job to impress others. Intrinsic goals, on the other hand, are ones that we have a strong internal motivation to pursue. In the survey, extrinsic goals included gaining wealth or social status, whereas intrinsic ones included cultivating relationships, helping other people, and contributing to growth, learning, and development.

The researchers found that, the more a purchase reflected people’s intrinsic goals, the more they thought it improved their well-being. In other words, the greatest well-being occurred when people spent money on something that was personally important to them.

To compare this finding with past research, the current study also asked participants to indicate to what extent their purchase was an experience or a material item. As in past research, participants did report higher well-being from experiences. However, when the researchers looked at both factors together, they found that how much a purchase reflected intrinsic goals explained more of the differences in well-being than whether something was material or experiential.

So, what does this research mean for our spending habits? Olaya Moldes Andrés, lecturer at Cardiff University and the study’s author, points out that we’re under a lot of pressure to spend money these days; just think about the number of targeted ads you see each time you open social media. However, this pressure to spend has a downside: In past research , Moldes Andrés has found that people who are exposed to more materialistic messages have lower well-being.

Before purchasing something, she recommends pausing to think about the reason for our purchase, and what use we will get out of it. If we’re spending money on trying to impress people or project a certain image (in other words, extrinsic goals), the purchase may not actually be worth it.

So, next time you’re planning to buy something, take a moment to think about whether it’s something you’re buying because you feel it’s what’s expected of you—or whether it’s truly something that you want.

About the Author

Elizabeth Hopper

Elizabeth Hopper, Ph.D. , received her Ph.D. in psychology from UC Santa Barbara and currently works as a freelance science writer specializing in psychology and mental health.

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• Sample Essays

Sample essay: does money bring happiness?

by Manjusha Nambiar · Published April 7, 2014 · Updated April 23, 2024

IELTS essay prompt

Some people believe that money brings happiness; others are of the opinion that having too much money is a problem. Discuss both views and give your own opinion.

Sample response

Almost all of us are motivated by money. The only reason that most of us spend 8 to 10 hours at the workplace is to earn money. Money probably doesn’t bring happiness, but not having enough money to take care of our basic needs will seriously limit our happiness. No one wants to live in poverty and no one will lend to the poor.

Money helps us lead a comfortable life. It helps us provide the best possible education for our children. It ensures that our near and dear ones have access to medical attention whenever they need it. Having more money than you need is unlikely to increase your levels of happiness, but not having enough will definitely destroy your peace of mind.

There is a limit to the amount of money that we can spend on ourselves. Still, the richest among us have amassed wealth they or their progeny will never use in their lifetime. Still, they aren’t satisfied. They want more. That is the lure of money. It never makes people content. Those who don’t have it want to have it. Those who have it want to have even more of it. Unfortunately, in our pursuit of riches, we often forget to live. We forget to appreciate the little joys that make our lives worth living.

Having a lot of money is definitely a problem. It even threatens our safety and security and makes us the target of thieves. Look at the richest people. They can’t move around freely like you or I. They are always surrounded by their personal security guards and often live their entire lives in constant fear of getting attacked.

To conclude, money is unlikely to make us happy, but we must still earn enough. However, in our pursuit of riches, we must not lose our souls. True happiness comes from spiritual awakening. Money has hardly anything to do with it.

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Manjusha Nambiar

Hi, I'm Manjusha. This is my blog where I give IELTS preparation tips.

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Wealth vs. Well-Being: The Truth About Money and Happiness

Money makes the world go round – or does it?

For every positive quote about money, it seems as though there are 5 negative ones.

Money is the root of all evil.

You can’t buy happiness.

Eat the rich.

Even as far back as Greek mythology, we can see warning lessons about money.

Just look at King Midas, who wished that everything he touched would turn to gold – it seemed like a great idea, until even his food and drink turned to gold!

Many people believe that money leads to corruption, greed, and hubris.

But what if money is everything?

Money Is Everything – Or Is It? An In-Depth Look at the Relationship Between Money and Happiness

Is money everything.

Money can’t buy everything…or can it?

Money can’t buy fulfillment, but it can buy great therapists, wellness retreats, and all the soul searching you need to do in order to find that fulfillment.

Money can’t buy happiness, but it can buy trips to the Maldives, fast cars, concert tickets, and a nice house.

The more you think about it, the more you realise that money can buy the vast majority of things needed for a happy life.

Here are just some things that money can buy:

Money can’t buy total security, but it can buy everything you need to cover your basic needs such as food, water, shelter, and clothing.

Money can also buy future security, as you can use it to build a retirement fund or invest.

It isn’t even just your security that money can buy – with the right amount of money, you can pay for a nursing home for your elderly parents, give your children money for a down payment on a house, and ensure that your pets are always taken care of.

One of the most important things that money can buy is time.

In How to Get Rich by Felix Dennis (which is a brilliant book, by the way), Dennis says that being rich is about being able to buy the only thing more valuable than health and love – time.

Time to learn a new language, or go and find yourself at a meditation retreat in India.

Money is about having the time to spend with loved ones, pursue further education, or travel to every country in the world.

When you stop trading your time for money at a 9 – 5, and learn how to make your money work for you (one of the key lessons in Rich Dad, Poor Dad), you have the time to focus on the things that make you feel happy and fulfilled.

Money allows you to pursue your passions

Whether you’ve always wanted to return to education to pursue a PhD, or you want to put your children through the best school, money is the key to doing just that.

True story – the reason I didn’t go on to get a Masters degree after my Bachelors was that I couldn’t afford to, and I knew that I wouldn’t have the time to work and study unless I took a part-time degree.

If I’d had money, this wouldn’t have been an issue, and I could have focused all of my efforts on my education.

One of the best things that money can buy is travel, and as many people say, ‘travel is the only thing you buy that makes you richer.’

The reason for this is that being exposed to new cultures, religions, and people, makes you grow in ways you never could if you stayed your home town.

It might not be fair, and it might not be right, but the truth is that with a lot of money comes respect, and if you want people to listen to what you have to say, having money certainly helps.

You can use this to your advantage, to draw attention to issues you care about, or fight for those who can’t fight for themselves.

No, I’m not talking about freedom from consequences (although corruption can certainly bring that too, heheh), but another kind of freedom.

Money can buy the freedom to be able to make spontaneous purchases without worrying about going over budget, or to take up new hobbies.

It can buy the freedom to say ‘yes’ to new opportunities that come your way, from last-minute vacations to international conferences, World Cup tickets, or your place on Elon Musk’s next trip to Mars (if you’re so inclined).

It also gives you the freedom to be generous and help others. This could mean simply buying gifts for your whole family at Christmas, or making a substantial donation to a charity of your choice.

Money buys you the freedom to start your own business, or pursue a lower-paying job that actually makes you happy.

It also gives you the freedom not to work at all, should you so wish!

Of course, money can’t buy health itself, but it can buy the best healthcare available, which is essential in countries that don’t provide free healthcare (or where the state healthcare is very limited).

It can also buy appointments with chiropractors, personal trainers, nutritionists, therapists, and dermatologists.

Money gives you the opportunity to pay for premium health and fitness products

Why You Should Care About Money

Money is everything.

Most of the negative things that people associate with money actually result from the obsession with making money and stereotypes that surround the super rich, rather than the money itself.

Money is neither good, nor bad. It is neutral.

You (yes you, reading this), should absolutely care about money and the things that it can do for you and your loved ones.

You see, money is more than just ‘pieces of paper,’ as some people like to say.

It is something that can be directly exchanged for things that bring you joy, things that bring your loved ones joy, and it can be used to help people thousands of miles away who aren’t as fortunate as you.

How to Make More Money

If money is everything (or at least something), then you’re probably wondering how to make more of it!

Here are 5 things you can do to start making more money right NOW.

Get Clear on Your Goals

Goals are powerful motivators that give us purpose and motivation in life.

By getting clear on your goals, you will be far more likely to achieve success.

First, figure out your why. When you know why you want the things you want, you’ll be able to set measurable SMART goals that align with your true purpose.

Break down your biggest goals into smaller milestones, which are easier to accomplish and keep you motivated.

Start a Side Hustle

The fastest way to start making money fast is by starting a side hustle.

Whether you’re looking for side hustles for stay at home moms, or easy freelance jobs you can do with no experience, there is something you can do online to start earning more money.

From selling clothes on Poshmark to making money selling feet pictures, there is truly something for everyone out there, and you never know – your side hustle just might turn into your 7-figure business!

Just one thing – don’t fall into the trap of joining an MLM. Network marketing is a predatory business model that NYBB does not endorse.

Even knitting can be a profitable side hustle!

Educate Yourself

We all have a responsibility to educate ourselves about money.

School won’t do it, and oftentimes, our parents won’t do it either, so becoming financially literate is our responsibility.

Read books (Rich Dad, Poor Dad is a must), watch videos, and talk to business owners and entrepreneurs to learn the secrets of their success.

Investing is something that everybody should do (in my personal opinion).

You don’t have to take huge risks, or put a large portion of your savings on the line – I make small monthly investments on eToro which have built up into a larger sum over time.

Investing also doesn’t have to be scary. Clever Girl Finance has a bunch of free courses about investing for beginners, and I can personally vouch for how great they are because I’ve taken them myself!

If you’re wary of investing, you could try starting with high-interest bonds – I have a couple of no risk savings accounts on Monzo that generate 3% AER!

Get Rid of Your Money Blocks

Money blocks can have a huge impact on our lives, and many of us have no idea they even exist!

A money block is a set of thoughts, beliefs, or emotions that stand in the way of your financial success.

These blocks can prevent you from getting out of debt, saving money, increasing your income, or achieving the lifestyle you desire, so it’s super important that we overcome these money blocks if we want to become financially free.

Developing a growth mindset is also a key part of overcoming your limiting beliefs surrounding money.

The Connection Between Money and Happiness

Can money really buy happiness?

The answer isn’t so simple.

Money and happiness share a complex and intriguing relationship that goes beyond a simple cause-and-effect dynamic.

It’s certainly true that having the money to fulfill our basic needs and create a sense of security can enhance our overall happiness and well-being – having to constantly worry where your next meal is coming from is not fun for anybody, and neither is constantly having to say ‘no’ to things you really want to do.

Numerous studies have discovered a correlation between a higher income and greater life satisfaction, which makes total sense. It’s natural to feel a sense of contentment when our financial worries are alleviated and we have the means to live comfortably.

However, it’s essential to recognise that the pursuit of money and material possessions can also have a negative effect on our happiness.

In fact, an excessive focus on money can often lead to heightened stress levels, anxiety, and a sense of social disconnection.

Factors such as meaningful social connections, personal fulfillment, and a sense of purpose play pivotal roles in our overall happiness. It’s crucial to strike a balance and not let the pursuit of wealth overshadow the significance of the other important things in life.

Overall then, money does contribute to our happiness to a certain extent, particularly when it fulfills our basic needs and provides a sense of security.

However, it’s important to recognise that true and lasting happiness goes beyond monetary measures.

Nurturing social connections, pursuing personal passions, and finding fulfillment in meaningful endeavors are essential ingredients for a truly happy and fulfilling life.

Money is Everything | Final Thoughts

The bottom line is that anybody who says that money doesn’t matter is probably suffering from some limiting beliefs about money that have become self-fulfilling prophecies.

Money might not be everything, but it is a tool that, when used correctly, can certainly have a positive impact on your life.

Money is not the root of all evil (the people behind it are), and wanting to have money doesn’t make you a bad person.

I hope that this article has given you some things to think about, and as always, if you have any questions then don’t hesitate to leave them in the comments section below!

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The post Wealth vs. Well-Being: The Truth About Money and Happiness first appeared on Not Your Boss Babe .

Featured Image Credit: Shutterstock / LightField Studios.

The content of this article is for informational purposes only and does not constitute or replace professional financial advice.

For transparency, this content was partly developed with AI assistance and carefully curated by an experienced editor to be informative and ensure accuracy.