26 September 2023

Point of purchase: Can money buy you happiness?

Start the conversation

Barbara Friedberg* says it’s important to understand when money can buy happiness and when all the money in the world won’t create joy.

Money is one of the most important commodities in the world.

And rightly so.

Unless you live off the grid, grow our own food and make what you need, then you need money to live.

I’ve learned a thing or two about why money can’t buy happiness and what else goes into creating a happy life.

Can money buy you happiness?

Money can’t buy happiness, but it can make your misery more comfortable.

On occasion, money can buy happiness, while there are other problems money can’t fix.

Understand when money can buy happiness and the situations where all the money in the world won’t create joy.

If you think shopping isn’t a way to buy happiness, you might be wrong.

If done correctly, shopping or spending money can buy happiness.

Are you one of those people that likes to shop to reward yourself, or to drown your sorrows and make you feel better?

If so, don’t beat yourself up or feel guilty due to excess consumerism!

Research shows that spending, if done correctly, can cause joy, according to Jan Bowen in a recent Psychcentral.com blog post.

Buy experiences

You’ve probably heard this one.

If you spend on travel you get a three-fer.

First you get the joy of planning and anticipating the trip.

Then you experience the travel, new places and exciting experiences.

Finally, you get to relive the fun in your memory and your pictures.

Spend to give you more time

Tim Ferris of The 4-Hour Work Week fame proclaimed the beauty of outsourcing.

I hire a house cleaner, take my car to the car wash and buy tools and virtual assistants to help with my business.

If I did everything myself, I wouldn’t have much time for fun.

Money can buy freedom

There’s an entire movement around the idea of financial independence and early retirement (FIRE).

Many of these early retirement sites focus on living austerely and aggressive saving.

The idea of the FIRE movement, which has its pros and cons, is that if you have enough money, you have control over your life and your time.

Retirees who have enough money to last and handle emergencies will remove one major life stressor.

Money can help others

Some of the best advice for sadness is to focus on helping someone else.

If you take your mind off yourself and give to others, that gives you happiness.

And donating cash can boost your happiness quotient too.

Money can reduce stress

The future is uncertain.

Unexpected situations, like the current pandemic can turn your life upside-down emotionally and financially.

Having an emergency fund equal to six to nine months of living expenses can significantly reduce the misery of financial unknowns.

In this scenario, money buys happiness.

The reasons money can’t buy happiness

I’ve hit my financial goal and I still have issues, worries, fears, anxiety, stress, envy and more!

What gives?

Several years ago, researchers found that once you hit $75,000 in income, more money doesn’t necessarily equate to greater happiness.

“Emotional wellbeing also rises with income, but there is no further progress beyond an annual income of ~$75,000,” reported researchers Daniel Kahneman and Angus Deaton.

Of course, you should probably increase $75,000 to $90,000 today, to account for inflation.

So, if you want to be happy, having enough income to live well is important.

But uber-wealth won’t catapult you into bliss!

Money can’t buy good health

Although money can buy top-notch medical care, it can’t buy perfect health or freedom from disease.

Money can’t buy perfect families

In fact, money has nothing to do with whether your kids will act out, skip school, do drugs or get in with the “wrong” crowd.

In fact, one of the biggest secrets and worries of the super rich is that they won’t be good parents.

Money can create problems, too

I know it’s hard to fathom, but having wealth creates worries and fears.

The rich have to manage their money or their financial planners.

Wealthy folks worry about losing it all.

The rich can overspend, go into debt and bankruptcy, just like anyone else.

The wealthy can get swindled.

You can’t buy happiness, and in the end, we’re all going to end up in the same place.

Why money can’t buy happiness is because happiness is an emotional state that waxes and wanes.

Happiness comes from being content with oneself, appreciating your worth as a person and how you contribute to society.

Put money in it’s proper place or reaching a certain number on your net worth spreadsheet likely won’t make you any happier.

Look for ways to both increase your financial situation and be happy with what you have.

These two goals aren’t incongruous but can live happily side-by-side.

In the end, money can’t buy happiness, but it can buy a certain level of financial security.

* Barbara Friedberg is an investment and wealth-building expert and fintech consultant. She tweets at @barbfriedberg.

This article first appeared at barbarafriedbergpersonalfinance.com.

Start the conversation

Be among the first to get all the Public Sector and Defence news and views that matter.

Subscribe now and receive the latest news, delivered free to your inbox.

By submitting your email address you are agreeing to Region Group's terms and conditions and privacy policy.