Can Money Buy Happiness?
Studies suggest that increasing your income can boost happiness, but only up to a point. Some research shows that happiness tends to rise until a person earns about $100,000 a year, after which it often plateaus. Why?
While money can’t buy happiness, it can reduce pain and stress. Being able to cover bills and meet basic needs lowers anxiety. As Arthur Brooks, a Harvard “happiness” professor and co-author of Build the Life You Want: The Art and Science of Getting Happier, explains: happiness and unhappiness are processed in different areas of the brain. That means something that makes you less unhappy doesn’t necessarily make you happier.
How Much Do You Need to Stop Feeling Unhappy?
According to Brooks, people often believe they need about 40% more than they currently have. But here’s the problem, that gap seems to stay the same even as our income rises. The same challenges that we had when we had less money, such as little savings and increasing debt can follow us when we earn more if we are not intentional about changing our spending behaviors. Likewise, if our expectations rise faster than our income, we will still be unhappy (Morgan Housel).
In surveys, people with more money tend to rate their life satisfaction higher—but their actual day-to-day mood and happiness don’t increase much. The constant chase for “more” often leads to more stress, not more joy.
Is It Worth Chasing Ever-Increasing Wants?
This raises an important question: Do you know what you truly want? Is it more or nicer stuff? Or, is it really:
- A better mood?
- More time with people you love?
- To feel safe and healthy?
There are five things we can do with our money:
1: Buy Stuff 2: Buy Experiences 3: Buy Time 4: Give It Away 5: Save It
Out of these, four (experiences, time, giving, and saving) tend to increase happiness. The one that doesn’t? Buying more stuff—yet that’s often what our brain craves the most.
So what will make us happier?
Changing our perception—the lens through which we interpret our financial life. If you see your situation as hopeless, you may feel stuck. But if you view it as something you can work through, you’re more likely to make confident decisions and find solutions.
Being aware of your behavior around how you spend money in general and learning to spend less than you earn and practice contentment no matter what your salary is – is key. Buying things on credit may feel good in the moment, but it comes at a long-term cost. As Brooks says,
“The less debt you carry, the happier you’ll be.”
“Your wellbeing is like a retirement account. The sooner you invest in it, the greater your returns will be.” —Arthur Brooks
To see his full podcast about happiness, click here: What Buys Happiness Podcast With Arthur Brooks
No Matter What Your Situation Is, You Can Change It!
Remember, You’ve Got This!
This material is for educational purposes only and
should not be construed as advice.
It is provided without warranty of any kind.