Money Can Buy Happiness

It’s commonly believed that money can’t buy happiness. If your income surpasses a certain amount, a bonus won’t make much of a difference, right? It also seems as if the effect of money on happiness should wear off the more you earn. These ideas have actually been backed up by multiple studies. Money matters to some extent, but there’s a threshold after which it has no observable effect.

Yet, money can buy most things that make people happy. If you’re well-to-do, you might have more time to spend with family and friends, which is crucial for one’s well being. Moreover, it’s well-established that people who are well off tend to have better health. In some sense, the outcomes of the studies on money are rather disheartening. In theory, we should be able to buy happiness. Thus, maybe we should rephrase the question ‘Can money buy happiness?’ as ‘How can money buy happiness?’

While money allows you to build relationships, money can also buy happiness in a more direct way. In one experiment, university students at the University of British Columbia in Vancouver were handed a 5-dollar bill. Group A was instructed to spend it on themselves, whereas group B was instructed to spend it on others. As it turned out, many group A students grabbed coffee or had lunch out. In contrast, group B students got to treat their friends or purchased something for a stranger. At the end of the day, the students were called and asked how happy they felt. The results were rather clear-cut: the students from group B reported significantly higher levels of wellbeing.

In another experiment, participants were told to recall an instance when they’d spent money on themselves and others and were asked how it made them feel. Similarly, participants who reflected on some time when they’d spent money on others reported feeling happier. The second study involved people from both Canada and Uganda, but the outcome was pretty much the same. That is, regardless of cultural differences, spending on others makes people happier. The results aren’t revelatory. Undoubtedly, everyone has experienced the joy of giving during Christmas. However, it’s quite remarkable that the results are so consistent and reproducible across the world.

Given all this research, how come we don’t spend our money more judiciously? As we’ve seen, spending money on others is a win-win; you make someone’s day, while also feeling good about yourself. In other words, it’s in your self-interest to give.

Firstly, people are often poor judges of what makes them happy. In the study involving the university students, most assumed that spending money on themselves would make them happier. Indeed, it seems as if the students are in good company. Many lottery winners lavish money on luxury goods or real estate. Secondly, another study indicated that the mere thought of money made people less generous. Upon receiving the 5-dollar bill, the students automatically became less inclined to spend it on others. It’s hard to evade this problem, but it’s worth keeping in mind.

To sum up, money can buy happiness if we spend it well. After all, spending a mere 5 dollars on others made a substantial difference to the mood of the Canadian students. Having a high income allows you to spend even more on others. Regardless of whether you purchase something for your father or donate money to a charitable organisation, it’ll make your day.