Can Money Buy Happiness? Experts Weigh in on the Biggest Misconceptions

For a long time, people have wondered if it's possible to buy happiness. Nowadays, many of us are living paycheck-to-paycheck and struggling with debt. So, is it possible to find happiness in the things we own? Or do we need to look for happiness elsewhere?

In recent years, some studies have shown that money can indeed buy happiness. But experts warn against relying too heavily on money as a source of well-being. Here are some facts about how money influences our lives and what experts say about the relationship between wealth and well-being.

What does it mean if money can't buy happiness?

One of the most popular myths in the world is that money can buy happiness. But some statistics show this myth to be false. A study by Princeton's Woodrow Wilson School for Public and International Affairs found that when people make over $75,000 a year, they are no more satisfied than those who earn less than $40,000 per year. Similarly, a Harvard University study conducted in 2016 found that money didn't make people happier in developed countries like the U.S., Denmark, Australia, Germany, and Canada. Other research shows that when it comes to life satisfaction overall, there is no correlation between wealth and well-being. Economist Betsey Stevenson says, "The data are clear: once your basic needs are met, more income does not have any clear benefits in terms of the average person's happiness or mental health."

The relationship between wealth and well-being

It's no secret that money has the power to buy many things. But that doesn't mean it will make you happy. According to experts, wealth can buy happiness if it is used in moderation. So, if you're working towards financial security and buying new things on a budget, you may be able to find some happiness there. However, some research says that wealthy people don't have greater levels of well-being than less wealthy people. This suggests that people with higher incomes might not use their money more productively or spend their money on more positive activities than poorer people. Another study found that people with lower incomes are happier when they're spending time with family or friends—or giving money to charity—instead of buying material goods. So how do you know what makes you happy? You might need to look further than your wallet for an answer.

How to find happiness outside of money

Money does buy happiness—but experts caution against relying too heavily on wealth as a source of well-being. In a TED talk, Elizabeth Dunn, a professor of psychology at the University of British Columbia, shares her research that found money can indeed make people happy. But she also warns that it's not enough to be wealthy—people need to do the right things with their money to reap the benefits of wealth. For example, people who spend their money on others or on activities they enjoy tend to experience more happiness from spending than those who purchase material goods and keep them for themselves. So what does this mean for your pursuit of happiness? It means you can find joy outside of wealth in giving back and in doing things you love. Happiness is about what you do with your time and your resources, not how much money you have.

What are the misconceptions about buying happiness?

Until a few years ago, many experts believed it was possible to buy happiness. But recent studies have shown that some people may be more content when money is not the focus of their lives. In the 1990s, researchers were able to dispel the idea that people could buy happiness. In 2013, researchers from Princeton and Harvard found that among respondents in four countries, wealth didn't have an impact on self-reported well-being after basic needs were met. Since then, experts have been trying to study this new phenomenon and figure out what it means for our society. They've come up with a few theories:

1) Money can influence what you value in life

2) Wealth doesn't always translate to happiness

3) Wealth only helps people who are already happy

4) Wealth can lead to peer group pressure and jealousy

Conclusion

In a recent study from the National Bureau of Economic Research, the authors argue that people with higher incomes are marginally happier. In other words, money may buy happiness. Researchers found that as income rose, people were marginally happier. In other words, money may buy happiness. However, the researchers found that the relationship between wealth and well-being is not linear -- meaning that there is no specific dollar amount at which people's happiness levels will increase. The study also found that how people spend their money is a predictor of their happiness levels. Those who spent money on others were more likely to report being satisfied with their lives. In other words, money may buy happiness. In addition, the researchers found that there is a limit to how many material pleasures people can buy. Once a person reaches a certain income level, they become more focused on other aspects of their lives, and happiness levels do not increase.

The study also found that how people spend their money is a predictor of their happiness levels. Those who spent money on others were more likely to report being satisfied with their lives. In conclusion, money may buy happiness.