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Why Money Can't Buy Happiness

Tis the season to be merry. Here's how.

We all want to be happy. Every day, we do countless things to make ourselves feel good, either in the short term or to prepare for the future. The problem is, according to science, we are pretty bad at predicting what is going to make us happy, either because we just don’t know what’s good for us, or because we do, but we’re too lazy to follow through.

RDNE Stock project/Pexels
Source: RDNE Stock project/Pexels

For example, research suggests that just 20 minutes of exercise can boost your mood, but it isn’t exactly something we want to do every day (or at all). So does getting enough sleep, but I’m lucky if I get to bed by midnight. Even when we do go through with the things that we think will bring us happiness, we tend to overestimate how happy these things will actually make us. For example, studies show that college football fans overestimate how happy they will be when their team wins (Hsee & Hastie, 2006). Likewise, in my own life, I worked hard to get my Ph.D., then to get a job, and then to get tenure, all of which I thought would make me ecstatic, but when I finally achieved these goals, instead of feeling a burst of joy, it was more like a flutter of relief.

Does this mean we’ll never be truly happy? Not quite. In fact, most people are happy most of the time. But if you’re looking to inject a bit more happiness into your life this winter, researchers have invested a lot of time into figuring out what things make us the happiest. Here’s what they found out.


It’s probably not a shock to learn that the happiest people tend to have the strongest interpersonal relationships, and they also get the most support from their friends and families (Card & Skakoon-Sparling, 2023). Indeed, researchers have consistently shown that there is a strong positive relationship between happiness and interacting with friends and family members. This is true for both extroverts (who get energized by other people) and introverts (who don’t), but extroverts tend to spend more time engaged in social activities, and they report more happiness overall (Lucas et al., 2008). This is true for both adults and children, particularly teenagers (Cheng & Furnham, 2002). Some researchers have even suggested that the relationship between happiness and social interactions works like a feedback loop, where engaging with others makes us happier, and then being happier in turn motivates us to engage more with others. This might help explain why extroverts are happier in general, since they tend to be more motivated to interact with others in the first place. But it’s important to note that introverts like socializing just as much as extroverts in many cases, they just may have different kinds of relationships with loved ones and need more downtime.

Helping and Gratitude

Besides being with people, helping those people has also been shown to make us happy. In fact, even a single act of giving can make us feel happy. In one study on this topic, people were given envelopes containing either $5 or $20. Half were told to spend the money on themselves, while the other half were told to spend it on someone else. They were then asked at the end of the study to report on how happy they felt. The amount of money they were given didn’t affect their happiness, but the people who spent the money on someone else reported feeling happier at the end of the day than the people who spent the money on themselves (Dunn, Aknin, & Norton, 2008). Follow-up research suggests that spending money on other people makes you particularly happy when you can see the difference that your generosity makes, when you feel some sort of close connection with the person or cause that you’re giving to, and when you make the decision to give on your own (Lok & Dunn, 2020).

Being thankful when someone else gives to you has similar benefits. One study found that people who were induced to feel grateful gave more money to others in an economic game than those who were not, regardless of whether they were giving to someone they knew or to someone they didn’t know (DeSteno et al., 2010). Further, people induced to feel gratitude put more effort into helping others than those who didn’t, again, regardless of whether it’s to help someone they know or a total stranger (Bartlett & DeSteno, 2006). Gratitude has also been shown to help us override some of our more selfish temptations and build self-control, helping us to be cooperative in future social interactions. Indeed, researchers have reported that inducing gratitude results in people waiting longer to obtain a reward, and likewise, increased gratitude is related to all sorts of positive health behaviors that require self-control, such as eating well and exercising more, and lower rates of drug and alcohol use (DeSteno, 2018).

What About Money?

We all think money is going to make us happy, but research on the topic has produced mixed results. Some studies have found that more money is always related to greater happiness. Others report that money does make you happier, but only up to a certain amount, and then once you have enough to live comfortably, more money doesn’t necessarily make you happier. In a more recent study, scientists who have found different results teamed up to solve the problem once and for all, and they found that the answer is a bit complicated. For people who are happy already, more money only makes them happier. However, for people who are generally unhappy, more money makes them happier up to about $100,000, but any more than that doesn’t help (Killingsworth et al., 2023).

It gets even more complicated than that. For example, making more money can make us do things that don’t make us happy—such as working more and spending less time with friends and family (Aaker et al., 2011). Further, more money brings with it more choices, which doesn’t necessarily bring happiness. For example, one study found that people are happy if they’re given a free trip to Paris or Hawaii, but they are less happy if they have to choose between them, which wealthy people can often do (Hsee & Hastie, 2006).

But even if more money doesn’t make us happier, research suggests that using it more wisely can. For example, in a large-scale survey that spanned the United States, Canada, Denmark, and the Netherlands, researchers reported that people who tend to spend money on services that preserve their time—cleaning services, someone to mow the lawn, or even going out to eat once in a while—are less stressed overall, and in fact, happier than people who are more likely to spend their money on material goods (Whillans, Dunn, Smeets, Bekkers, & Norton, 2017).

These researchers went on to do an experiment that looked at whether spending money on services that save time can act to reduce stress and make people happier. They gave a group of people money to spend ($40) on themselves for two consecutive weekends. On the first weekend, the people were told to spend the money on something that would save them time. On the second weekend, they were told to spend the money on something for themselves, a material purchase. After each weekend, the experimenters called the people and asked them how happy they were, and how stressed they felt. Consistent with their survey results, people reported feeling significantly less stressed and happier after spending money on something that saved them time than on a material purchase. On top of that, there was a direct link between how stressed people said they felt and how happy they reported to be, suggesting that the reduction in stress itself is what made these people feel happier (Whillans, Dunn, Smeets, Bekkers, & Norton, 2017).

On Finding Happiness

The moral of the story here is that the things that make us the happiest aren’t necessarily the things that cost the most. This holiday season, perhaps we can make ourselves and others the happiest by giving them the gift of time or togetherness. For your kids, consider giving them things you can do together, instead of toys they’d play with on their own. And instead of giving your parents that new vacuum they’ve been eyeing, maybe offering to clean their house for them (or getting them a cleaning service) would make them even happier. Whatever you choose to do, remember that the thing that consistently makes people the happiest is being with other people, so perhaps the best gift you can give this season is the gift of YOU.


Aaker, J. L., Rudd, M., & Mogilner, C. (2011). If money does not make you happy, consider time. Journal of consumer psychology, 21(2), 126-130.

Bartlett, M. Y., & DeSteno, D. (2006). Gratitude and prosocial behavior: Helping when it costs you. Psychological science, 17(4), 319-325.

Card, K. G., & Skakoon-Sparling, S. (2023). Are social support, loneliness, and social connection differentially associated with happiness across levels of introversion-extraversion? Health Psychology Open, 10(1), 20551029231184034.

Cheng, H., & Furnham, A. (2002). Personality, peer relations, and self‐confidence as predictors of happiness and loneliness. Journal of adolescence, 25(3), 327-339.

DeSteno, D. (2018). Emotional success: The power of gratitude, compassion, and pride. Houghton Mifflin Harcourt.

DeSteno, D., Bartlett, M. Y., Baumann, J., Williams, L. A., & Dickens, L. (2010). Gratitude as moral sentiment: emotion-guided cooperation in economic exchange. Emotion, 10(2), 289.

Dunn, E. W., Aknin, L. B., & Norton, M. I. (2008). Spending money on others promotes happiness. Science, 319(5870), 1687-1688.

Hsee, C. K., & Hastie, R. (2006). Decision and experience: why don't we choose what makes us happy? Trends in cognitive sciences, 10(1), 31-37.

Killingsworth, M. A., Kahneman, D., & Mellers, B. (2023). Income and emotional well-being: A conflict resolved. Proceedings of the National Academy of Sciences, 120(10), e2208661120.

Lok, I., & Dunn, E. W. (2020). Under What Conditions Does Prosocial Spending Promote Happiness? Collabra: Psychology, 6(1).

Lucas, R. E., Le, K., & Dyrenforth, P. S. (2008). Explaining the extraversion/positive affect relation: Sociability cannot account for extraverts' greater happiness. Journal of personality, 76(3), 385-414.

Whillans, A. V., Dunn, E. W., Smeets, P., Bekkers, R., & Norton, M. I. (2017). Buying time promotes happiness. Proceedings of the National Academy of Sciences, 114(32), 8523-8527.

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