Can money buy happiness? It would be nice to give a definite “yes” or “no” making the issue black and white instead of shades of gray. The truth is, however, that it really depends on a number of factors on whether money can buy happiness. Still, there are some indicators which point to areas where money can help with happiness.
When it comes to basic living standards, studies show that money has a great influence on happiness. Harvard psychologist Daniel Gilbert, who works on questions such as the relationship between money and happiness, says studies show that all we need for happiness is to have enough money for the basic necessities of life. If we have enough for food, clothing and shelter – which he estimates to be roughly $40,000 a year – we have enough money to be happy.
In this sense, for people living on salaries that don’t meet their basic needs, money can buy happiness. A increase in wealth from $10,000 to $40,000 a year will make a tremendous difference in the quality of their life. Simply stated, money makes a significant contribution in the lives and happiness of people who have little of it.
Once these basic necessities are met, however, money doesn’t seem to help a whole lot when it comes to happiness. After the basic needs are met, the next $50,000, $100,000, $1,000,000 or $10 million has little effect on your happiness.
What the additional money can do is buy time. That is, the more money you have, the less time you have to spend earning it. If you make $50,000 a year but have no savings, you still have to work. If you have $1 million in savings earning 5%, you will earn $50,000 a year from interest giving you the same income with no work. In this instance, you have a choice of how you want to spend your time.
Thus the results of the question of whether money can buy happiness quickly shift from the money itself to how you spend the time which the money allows. If you have a lot of money and are able to spend your time any way you want, you’re not going to be happy if you haven’t developed relationships or activities that make you happy. You will simply spend the time wondering how to spend the time — and why you aren’t happy even though you have money. If it were only money that mattered, a person with $10 million would be 10 times happier than someone with $1 million. We all know that this is not the case.
This is all pretty straightforward and people would be a lot happier knowing these facts about happiness and money. Once having the knowledge, it would seem easy to take the steps necessary to make yourself happier in relation to money except that society throws a curve ball into the equation. While we as individuals want to be happy, society wants us to spend and consume. If our main concern is happiness and we know happiness after a certain income level isn’t dependent on money, this causes a lot of problems for society as a whole. Society therefore has cleverly replaced the truth by suggesting that consumption will bring us happiness.
The societal message is clear in the advertisements you see all around you: the way to be happy is to keep up with the Jones’. Spend money to get the latest and greatest gadget and you will be happy. If it doesn’t make you so, then something else you purchase will surely do so. With all the advertising constantly bombarding you telling you that your happiness is linked to spending more, it’s difficult to step back to find that it just isn’t true.
The challenge is to take this new information and use it to your advantage. Knowing this places you in control to take the steps you need to increase your happiness no matter where your income level falls. Those that aren’t earning enough to meet their basic needs need to concentrate their efforts on earning more money to meet those basic necessities. Those who are earning enough should make sure to take the time to nurture relationships and activities that make them happy and not focus solely on increasing their wealth.