Money does indeed buy happiness, says science

Money can’t buy happiness- goes a popular saying. But science begs to differ. According to an August 2019 study published in the journal Applied Research in Quality of Life, the way you view wealth and materialism may have a significant effect on how satisfied and happy you are with life in general.

“Money can be a tool to motivate you to achieve major milestones in your life, which can make you feel happier in the long run,” said Jenny Jiao, the study author and an assistant professor of marketing at Binghamton University School of Management.

The researchers analysed 7,500 German adults for the study. They concluded that people who focused on “success materialism” instead of “happiness materialism” were more motivated and happier. “Success materialism” is the idea that wealth signifies success. Happiness materialism, on the other hand, is the belief that wealth is an indicator of a happy life. Success materialism improves people’s drive to work and improve their standard of living. People who think in terms of success materialism are more satisfied with present lives and hopeful about the future.

But people who buy into “happiness materialism” can focus on work and wealth creation at the expense of other areas of life that make an impact on life satisfaction such as family, work, and health.

How much money does it take to be happy?

However, the above study didn’t look into how income specifically affects life satisfaction. But a 2010 study from Princeton University found that there’s a link between happiness and wealth. The study found that it takes about 75,000 dollars a year to be happy. According to the study, when people make more than 75,000 dollars a year, their happiness doesn’t increase. But generally for people with incomes below that point, the lower their income, the worse they feel about their situations.

Of course, the study was based on American incomes. How much money it takes to be happy varies greatly around the world. The global number for optimum life satisfaction is 95,000 dollars for an individual. The figure would likely be higher for families. This is according to a study in published in 2018 in the journal Nature Human Behaviour.

The lead author of the study, Andrew T. Jebb explained that while the point at which more money has no bearing on your happiness has always been up for debate, the study aimed to establish a general threshold. The analysis utilised data from the Gallup World Poll, which includes observations from more than 1.7 million people from 164 countries.

“What we show here for the first time is that in some places increasing income after some point actually leads to decreases in life satisfaction,” explained Ed Diener a co-author of the study and a Gallup senior scientist who has studied happiness for more than 35 years. “We don’t yet know why this is – perhaps these people work so hard that they cannot enjoy life, or they become focused mostly on materialistic goals or whatever. We just don’t know.”

The key is to buy time

Other than satisfying your basic need, one of the ways through which money can make your life happier is by buying you time. A University of British Columbia study published in the Proceedings of the National Academy of Sciences of the Unites States (PNAS) journal, found that people who paid to have others do “unenjoyable daily tasks” such as domestic chores reported increased life satisfaction than those who didn’t spend their money this way.

For the study, researchers questioned a total of 4,500 people in the US, Netherlands, Denmark and Canada about their time-related stress, whether they spent money of time-saving services, and life satisfaction. 28 per cent of those who spent on time-saving services were more satisfied with their lives than others. The results held up even after adjusting for income, although lowered to 15 per cent happiness boost as people had less money to spend on buying back time.

“People who hire a housecleaner or pay the kid next door to mow the lawn might feel like they’re being lazy,” said the lead author Dr Ashley Whillans, an assistant professor at Harvard Business School. “But our results suggest that buying time has similar benefits for happiness as having more money.”

Buy experiences, not things

In addition to buying time by outsourcing “unenjoyable” tasks, buying experiences rather than material things can bring you happiness. A psychology professor from Cornell University , Thomas Gilovich, made four studies over  the decades. He came to the conclusion that happiness is derived from experiences, not things.

“People often think spending money on an experience is not as wise an investment as spending it on a material possession,” he explained. “They think the experience will come and go in a flash, and they’ll be left with little compared to owning an item. But in reality we remember experiences long afterward, while we soon become used to our possessions. At the same time, we also enjoy the anticipation of having an experience more than anticipation of owning a possession.”