Can more money buy happiness? True or false?

Sophie Edmunds

While most of us would probably answer false and deny having such a cold, mercenary view of our emotional realm, a study of 400 Americans’ intuitions concerning the relationship between wealth and happiness, which was conducted by psychologists at the University of Columbia, suggests otherwise…

Participants were asked to imagine their levels of happiness on ten different incomes. When their answers were compared with data provided by people actually living on those incomes it was clear that the participants had overestimated how unhappy they would be on a smaller salary, despite the fact that a third of them were themselves on the lower end of the income spectrum provided.

So clearly we tend to assume a stronger connection between money and happiness than there actually is. But why? Why do we mistakenly equate our pay-packet to our satisfaction with life and ourselves? 

Well, for many people, this connection is first established in childhood through the concept of pocket-money. By introducing a financial incentive for being ‘good’ (whether that’s defined as doing chores or, the impossible, consistently achieving top marks at school) the mass of your piggy bank becomes a measure of your successes. And success equals happiness? Right?

This unhealthy association of self-worth, happiness and money continues into adulthood. People tend to experience feelings of shame and humiliation if they’re forced to ask a friend for financial support because, heirs and heiresses aside, most of us acquire money through our own efforts. Even the vocabulary we use to describe income (‘earnings’, ‘takings’, ‘gains’ etc) posits money, and one’s ability to make it, as a marker of value in itself. By this warped logic, less money seems to suggest less effort, or worse, less success in spite of it… 

Hold up. If this pandemic has taught us anything it’s that some of the most valuable and essential jobs in society (the carers, the delivery drivers and the hospital cleaners to name a few) are actually among the lowest paid. The income of these key workers doesn’t, and could never, come close to encapsulating the contribution and the sacrifices they have made to keep the country running. That connection between money and success doesn’t seem so convincing now, does it…

Having more money might seem to grant those who do with more control over life. With money comes greater possibilities, the ability to choose to say no to that pair of Balenciaga boots, rather than being impelled to. However, as a whole host of lottery winners have proven, this is not always a good thing. For instance, five years after winning $16mill in Pennsylvania in 1998, William Bud Post III was left a bankrupt, 6 time divorcee serving a prison sentence for firing a shotgun at a debt collector. He described his big win as a ‘nightmare’ to The Washington Post. Moral of the story: more money does not make us better with it. And ‘rich’ is only what’s left over.

So, how do we start to feel good about money without judging the size of our bank accounts?

Step 1: Well, first things first, STOP comparing your financial situation to others. There will always be someone who earns more than you (unless, of course, you’re Jeff Bezos…). Comparisons will get you nowhere. They’re pointless and will only leave you feeling aggrieved so don’t waste your time. 

Step 2: STOP focusing on how much you earn. Did you know that listening to 2 minutes of your favourite music is made less pleasurable if you calculate your hourly rate beforehand? This is because you can’t help but dwell on how much that 2 minutes ‘costs’. So rather than concentrating on what you earn, shift your attention to what you do with it. Take pride in good money habits (such as sticking to the 50/20/30 budgeting rule) and make a pledge to yourself to avoid spending on things which don’t make you happy. One tip is to spend your money on experiences, rather than on material possessions because we remember experiences for longer than the fleeting rush of buying something new. What’s more, you’re less likely to compare yourself to others when you buy experiences, compared with when you collect possessions. Happiness levels are also shown to be increased by spending money on others and donating to causes which reflect your values. That being said, although the pleasure we derive from saving up and treating ourselves to a material possession is shorter lived, it’s still pleasure all the same. They call it retail therapy for a reason, after all. 

If you take away one thing from this blog post it’s this: your net-worth should not determine your self-worth. Money isn’t going to transform you — true happiness costs too much for that.