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They say money can’t buy happiness. But is that true?
If you ask me, this adage holds up in some ways and falls short in others, depending on how you look at it.
A lack of money can certainly bring about misery, and getting more money can alleviate some of that misery.
But at the same time, there are plenty of wealthy people who are very unhappy, and lots of people in lower income brackets who live content, joyful lives.
The correlation between money and fulfillment is thorny and complex, so let’s dive into some of the truths, myths, and misconceptions about the idea that money can’t buy happiness.
The science of wealth and happiness
If you’re curious about whether money can buy happiness, you’re in good company. Scientists and psychologists have been studying the connection between finances and mental well-being for a long time.
You may be familiar with an often-cited Princeton University study from 2006, which found that individuals experienced more happiness in their day-to-day lives as income creased, until a point: At $75,000, happiness levels stopped going up, even as people gained more wealth.
For many years, people have referenced this study to indicate that after one is earning enough to be comfortable, happiness levels no longer increase.
But that study is more than a decade old, and more recent research had different results.
In a 2021 study from the University of Pennsylvania, research found that happiness rose significantly up until folks were earning $100,000 annually.
While researchers didn’t draw this conclusion, I wonder if this simply reflects the fact that everything is more expensive today than it was in 2006, and thus, a higher baseline income is necessary for happiness.
The study also found that across all income brackets, there was a certain number of individuals who were consistently unhappy, regardless of how much money they had.
“For instance,” writes Matthew Killingsworth, lead author of the paper, “if you’re rich and miserable, more money won’t help. For everyone else, more money was associated with higher happiness to somewhat varying degrees.”
The anxiety of insufficiency
I remember in 2017, when I got a new job and a raise that brought my annual pay over $75,000.
It was a huge change, equating to an extra $1,000+ in my bank account every month. And that had major knock-on effects on my life.
I no longer had to scrimp and save just to buy groceries.
I wasn’t losing two-thirds of my income to rent.
I could splurge on fun, random purchases.
I started paying off my student loans faster.
And all of that made me a much happier person.
But does that mean money bought my happiness? Or was it simply that the lack of money made me anxious and unhappy?
There is another study, published of The Journal of Positive Psychology in April 2023, that looked closer at this question.
This study found that people’s economic status can affect their happiness because it’s tied to meaning in life.
Researchers asked participants questions that prompted them to think about money (for example, word scrambles involving financial terms). Afterward, they found participants with lower income “experienced a lower sense of meaning in life,” whereas those who came from higher income brackets felt more positive about their life’s greater meaning.
However, this study doesn’t actually prove that money causes happiness.
Instead, it says something about societal norms. Rather, it’s the way we perceive money and how it’s connected to deeper meaning that causes unhappiness.
If we weren’t told from a young age that money is equivalent to status and meaning, then the results of this study might be very different.
“People’s financial situations can really affect their day-to-day well-being in ways they might not recognize,” said Sarah Ward, who led the study. “It’s important to think about how we might structure messages about money and about earning money in ways that are more positively framed for people who don’t have it.”
If you want to go deeper into the true meaning of life, we have quite a few articles that will scratch that itch:
The myth of material happiness
If advertisers had their way, they’d have you believe happiness is only a purchase away. If you could just afford the latest iPhone, that new truck, or a designer jacket that costs more than your rent, then you’d finally be happy.
Sound familiar?
That’s because there are many, many marketers out there who have mastered the art of what I call “insecurity marketing.”
They tap into your anxieties and hidden desires, and then they create captivating, flashy, or subtle ads that convince you a certain purchase would solve the problem.
This is why you may feel like crap after scrolling through TikTok or watching TV—the ads you see on these platforms are designed to make you feel bad about yourself, because then you’ll be in the right mindset to “solve” your problems with your wallet.
The reality is, material purchases very rarely lead to long-term happiness. And how expensive an item is does not correlate at all to how happy it will make you.
For example, as I’m writing this I’m sitting in my home office, which until recently was pretty drab—just a desk, a chair, and white walls. It was making me unhappy, so I decided to give it some new life.
I bought string lights, made some wall art, and thrifted a comfy reading chair. It all cost me around $150, and I cannot tell you how much happiness it’s brought me, since I spend so much time in this room.
My iPhone, which cost 10x as much, hasn’t brought me nearly as much happiness. In fact, if anything, it brings me stress and anxiety, and I am constantly looking for ways to use it less.
You may not be consciously thinking, “I’m going to buy this to make myself happy,” but that doesn’t mean your purchasing behavior isn’t motivated by the subtle signals advertisers send your way all day, every day.
If you’d like to stop spending so much on things that don’t really bring you happiness, I highly recommend watching some of the “de-influencers” on TikTok and Instagram, who can talk you out of these purchases before you spend too much.
@depressiondotgov #duet with @Ana Nava #targetfinds no hate to this particular creator, I just feel like we all overconsume and are convinced to spend money we don’t have on #garbage #overconsumption ♬ original sound – Ana Nava
The endless pursuit of more, more, more
There’s a sneaky belief that lurks in the back of many of our minds: If I could just earn a bit more, then I’d finally have enough to do everything I want.
Travel the world, start a family, buy a house—whatever your dream is, it always seems just a paycheck or two out of reach.
This mindset can trap us in a relentless cycle of “more.”
More hours at the office, more missed dinners with family, more weekends spent working instead of relaxing or exploring hobbies. We grin and bear it at soul-sucking jobs, and toil away for toxic bosses… And for what?
By the time we reach that elusive financial goal, we’re too burned out to enjoy it.
I’ve seen friends and colleagues chase this mirage, always believing happiness and fulfillment are just one promotion away. But once they get there, the goalposts move. Suddenly, it’s a new title they need, or a bigger house, or a more luxurious car. It’s never enough.
The irony is, while we’re all chasing more money to do the things we think will make us happy, we’re missing out on happiness itself.
Happiness isn’t waiting for us at the end of a rainbow of wealth; it’s built in the moments we’re too busy to notice because we’re chasing something else.
I’m not saying money isn’t important. It is. It’s crucial for covering our basic needs and giving us a sense of security.
But after a certain point, its ability to significantly impact our happiness diminishes. What doesn’t diminish is the value of time—time spent with loved ones, time spent on activities that fulfill us, time spent living rather than earning.
Granted, sometimes getting more money does mean you get more time. A higher-paying job might mean you can take more vacations, or that your hours are less rigid.
But it’s equally common, in my experience, for the pursuit of “more money” to be the very thing that eats up all your time. And when so much of our joy and happiness happens in our free time, this can be a huge mistake.
The wise way to spend for happiness
Does money buy happiness?
Maybe, if you spend it the right way.
The way you allocate and prioritize your money plays a huge part in determining whether your financial situation will bring you joy or misery.
For lots of people, the idea of budgeting sounds like the opposite of happiness. It’s boring, stressful, and requires you to actually look at your bank account regularly.
If you’re one of those people, I encourage you to flip your thinking on the purpose of a budget. Try this:
A budget’s purpose is to make sure you’re spending money on the things that bring you the most happiness, and not throwing away money on things that don’t.
Yes, a big part of your budget will be dedicated to life’s necessities: rent, bills, loan payments, groceries, etc.
But figuring out how much you need for those is only the first step; after that, the fun begins.
Once you know how much “extra” money you have each month, you can figure out exactly how to spend it (or save it) so it brings you more happiness.
For example, imagine you take a look at your budget and see you have $500 left over in spending this month. In the past, you might have blown through that $500 on random stuff—a ridiculously expensive Uber Eats order that arrived cold; that last round of drinks that no one needed; a new video game (even though you already have four you haven’t played).
Now, because you’re budgeting, you can pause and think: What would make me happiest with this $500?
Instead of that delivery order, treat your bestie to lunch at your favorite cafe.
Instead of that last round of drinks, buy those comfy new sheets you saw on Amazon.
Instead of that video game you don’t play, tuck the $70 into your savings account to use on a future date.
Doesn’t all of that sound better and more meaningful than the mindless spending that happens without a budget?
If you don’t have one yet, you can get started quick and easy with our college budgeting guide, which includes this template:
The best things in life are free
There’s this old Barrett Strong song that starts out with this line:
The best things in life are free, but you can give them to the birds and bees, I need money.
I love this tune, not just because it slaps, but because this song calls out the fact that the phrase, “The best things in life are free,” often sounds like utter BS.
People often recite this line instead of saying, “Shut up and be happy about struggling financially.”
The trite phrase ignores the simple truth that sometimes, we just need money for things to get better.
That being said, if you can forget all those connotations, then there IS truth in this saying. The best things in life really are free.
Here’s a list of things that have brought me joy in the last few days:
- Watching the sunset while petting my dog
- A long phone conversation with my dad
- Morning coffee with my roommate
- A crossword puzzle I printed offline
- A novel I finished reading, borrowed from my library
- Eight hours of deep sleep
All of these things were completely free (except the coffee beans, I suppose).
I could add more to this list, but I’d be hard-pressed to think of anything expensive that brought me more joy than these simple freebies.
Living in a capitalist society, where most of life is monetized, it’s easy to forget that the good stuff is totally free.
Advertisers and corporations would rather I forget that I can watch a sunset without paying for the view. They would rather I buy my books on Amazon instead of getting them from my library. They would even like me to spend money on apps and clothing to improve my sleep.
Don’t let them convince you that life is joyless when you don’t have money, because it’s simply not true.
The impermanence of wealth
Not to end this article on a downer, but… we’re all gonna die.
Well, someday, anyway. You will die, I will die, all of us.
And when we die, how much will the money we made here on Earth matter to us?
Of course, I strongly encourage you to set aside money for your future. There’s a very good chance you will live a long life, and having money to spend when you’re done working will be key to happiness later on.
But.
Nothing in life is guaranteed. If you only focus on saving money for your future, and refuse to spend money on things that bring you joy right now, true happiness may elude you.
This goes back to my point about budgeting. Yes, you should be setting a good portion of your extra money aside to improve your long-term financial health. But not every last penny.
You should have a set amount of money from your budget to spend on in-the-moment things that bring you joy. Choose little gifts for yourself based on your budget. If money is tight, splurging on a fancy coffee is likely more realistic than booking an impromptu trip.
Either way, these little treats are essential for happiness day-to-day, which is just as important as long-term joy.
So, what’s the verdict? Is it true that money can’t buy happiness?
Certainly, improving your finances can reduce anxiety and give you more free time to enjoy the things that matter. Learning to spend your money wisely can make the funds you have, however meager, go farther in the joy department.
But remember that money is far from the only ingredient necessary for happiness, and life’s greatest joys don’t come with a price tag.