Does money make you happy?
A very interesting question, and one that I think is difficult to answer on a global scale, because each and every one of us is different, with individual needs, wants, and desires, and varying personalities and thoughts, on how money and all its benefits can bring us happiness and joy.
It is fair to say though, that many people think they will be happier if they had more money.
Previous research has shown that it’s certainly very difficult to be truly happy if you live in poverty. If you’re always hungry or cold or living in unpleasant accommodation, unable to pay your bills or put food on the table, and owe people money, happiness can be in short supply.
So it has been academically proven, that below a certain level of income and wealth, people are less happy and less satisfied with their lives, than the average.
But is the opposite true for people with more money? It seems that research into this area often presents different findings, related to the connection between income and happiness.
Keeping up with the Jones’s
On the one hand, increasing income can bring increasing pressures to “keep up with the Jones’s”. We see what others have, and think we should also have it, to prove just how wealthy we are. Before you know it, we have spent all our pay rise or bonus, plus more, on useless items we didn’t actually need. Now we have even less wealth than we did before, because our spending habit has gotten the better of us.
The short term happiness of the pay rise, or bonus, has now evaporated, and we are back to average happiness again. Even if you are paid £100,000, this won’t make you happy, if you spend £110,000, and end up in debt.
But on the other hand, separate research has discovered that there is a link between increasing happiness and increasing income, but interestingly only up to a certain level.
The income level for maximum happiness is £75,000 per year. Anything above this level doesn’t generate any more happiness, so people on £150,000 are just as happy as those on £75,000, but no happier.
People on lower incomes, of £60,000, £50,000 and £40,000 are progressively less happy but happier than those on £30,000 or £20,000.
Importantly, it’s not money itself that makes people happy, as staring at a pile of £20 notes on the table will only do so much.
It’s more the indirect use of money which can bring happiness.
What a certain level of money allows you to do, is direct your money towards purposes, which are likely to bring you happiness and satisfaction.
This means that it is the ability, to be able to afford the goods and services that bring personal satisfaction and happiness that matters. These things maybe something like, gym memberships, golf lessons, spa days, new cars, foreign holidays, eating out in posh restaurants, or whatever else may appeal to you.
It can also include being able to afford services, such as a house cleaner, laundry maid, gardener, and painter and decorator, which can provide you with more time to do whatever you prefer to do with it. Be that more hobbies, more exercise, more time with the family, a bit of charity work, or even sitting in the garden, or next to a swimming pool.
These are some of the things that can make you happy, not money itself. It’s the ability to be able to do them, that’s created from having money.
I do think money can bring you happiness, even if it is indirectly as noted above. Being financially secure, and able to pay your bills as they fall due, without relying on any employer or anyone else, is a great foundation to build happiness upon.
QUOTE: I'd rather be rich and miserable than poor and miserable. Theo Paphitis.