Money Can Buy Happiness?

Most studies of the link between money and happiness have shown that money does not buy happiness.  Americans are no happier today than they were in 1940 and we certainly have significantly greater material wealth.

Of course, we need enough money so that we don’t have to worry about money.  Not having enough money can be very stressful and can affect people negatively.  There is a correlation between wealth and happiness for the very poorest countries in the world.  And a recent study found that money can buy happiness for households with incomes below $75,000.  But if you make more than that money does not buy happiness.

Or does it?  Money actually can buy happiness if you spend it the right way.  Having more money to spend on things does not increase your happiness, but spending money on others or on experiences can.

Spend money on others

Helping others is an extremely effective strategy for increasing your positivity.  In one study people were given either $5 or $20.  Half were asked to spend the money on themselves and the other half to spend the money on others.  The people who spent money on others reported feeling much happier than those who spent the money on themselves.  And the amount of money made no difference.

Spend money on experiences

Studies have also shown that spending money on experiences leads to significantly greater happiness than spending money on things.  We quickly get used to the material objects we buy, whereas experiences produce positive emotions that are more meaningful and last longer.  Our happiness is increased not only during the experience, but also beforehand as we anticipate it and afterward as we remember it.

Try spending your money in ways that will increase your happiness.  Donate to charity, buy someone a Starbucks, go to a concert, take a vacation, or go out to dinner with friends and make it your treat!