Can Money Buy Happiness? Ask Yourself This Question Instead

Money makes us happier, but only up to a certain point.

Posted Jan 11, 2021 | Reviewed by Lybi Ma

Liz West / Wikimedia Commons
Source: Liz West / Wikimedia Commons

Can money buy happiness? Well, it certainly doesn’t hurt. Generally speaking, research shows a pretty strong relationship between income and happiness at lower ends of the income spectrum. For instance, if you make $10,000 a year and suddenly you receive a $5000 raise, yes, your overall level of happiness is going to go up. 

However, if you’re making $100,000 a year and you get that same $5000 raise, odds are that your overall level of happiness is not going to change all that much.

But, in my mind, the question of whether money can buy happiness misses the point. The better question to ask yourself is: How can I be happier? Coming at it from this angle, we can identify income as one part of the happiness equation. If you don’t have enough money to cover your basic needs — that is, food, shelter, medical expenses, and other necessities — then thinking about ways to earn additional income is going to be an important step towards improving your overall quality of life. 

But, after your basic needs are met and you have a bit of extra money to cover unforeseen expenses, the relationship between income and happiness gets a lot murkier. It is not at all clear that making more money helps you become happier more than other things you might do to improve your happiness such as spending time with loved ones, exercising more, engaging in new experiences, seeing a therapist, and even working less.

In fact, some research has compared lifestyle differences between millionaires and average people and has found that millionaires’ lives are actually remarkably similar to the lives of regular people. They both spend about the same amount of time on their phones, with family, sleeping, and relaxing. And, remember, we all enjoy a higher quality of life than even the richest people in the world did a century ago, people like the Vanderbilts, Rockefellers, and Carnegies. 

But where there are differences, and where those differences may actually translate into higher levels of happiness among present-day millionaires, they are:

  1. Millionaires tend to spend more time engaging in active leisure pursuits such as praying, exercising, and volunteering as opposed to passive leisure pursuits such as napping, watching TV, and resting
  2. Millionaires tend to engage in professional pursuits that offer a high degree of autonomy

In other words, they tend to work in environments where they can be their own boss or where they have a lot of latitude to chart their own professional path within a broader organization. Again, it is important to note that millionaires and non-millionaires both spend about the same amount of time working.

To answer the question of whether money can buy happiness, it certainly helps at the lower end of the income spectrum. Beyond that, it is our lifestyle and life decisions that bring us happiness. Whether we’re rich or not, we can all make small changes — such as being more active and cultivating more autonomy in our professional and personal lives — that improve our overall quality of life.