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Money Can Buy Happiness?

by Beth on September 29th, 2010

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!

  1. Suzy permalink

    Taped to my computer monitor, where I can see it all day long, is a fortune from a Peking Noodle Company cookie that has been with me for at least eight years: “Joyfulness will prolong your days.”

  2. I’ve been trying to teach my kids the difference between temporary happiness and lasting joy. The latter comes from non material items. This article and these studies will help!

  3. Beth permalink

    What an important lesson to teach our kids! It is surprising how fleeting the effect of acquiring material things on our happiness is!

  4. Francesco Frova permalink

    I guess I may sound repetitive, but that’s just another great article.

    Question: is it possible to add a “Share” button to the blog?
    I will re-post them anyways, but that would make the life easies!

    Ciao! – Francesco

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