Does More Money Make You Happier? Yes, But It's Complicated

We've all heard the phrase: “Money can't buy happiness.” But how true is this, exactly? Growing up poor in rural Idaho, I often took comfort in this idea, reassuring myself that those with more money weren't necessarily any happier than I was. But sometimes I wondered: Am I just fooling myself?

Of course, money can't replace the deep joy and meaning we find in relationships and experiences. But there's no denying that financial security feels pretty darn good.

“Money can bring about happiness or a sense of satisfaction that can feel like happiness because it allows security and reduces constant financial anxiety and fear,” explains Sarah Whitmire, LPC-S, ATR-BC, a licensed professional counselor and founder of Whitmire Counseling and Supervision.

Why We Think Money Might Buy Happiness

When you think of happiness, things like friends, family, and life’s simple pleasures often come to mind—not money. So, where does the idea that money can buy happiness come from?

According to Kanchi Wijesekera, PhD, a licensed clinical psychologist and clinical director of the Milika Center for Therapy & Resilience, the origin of this idea is multifaceted. She notes that poverty itself is associated with more stress and a higher risk for mental health issues. 

“There are some caveats, but it can be harder to feel happy when you're living under the chronic stress of poverty and all it entails,” she says. “You may not have the same time and energy to invest into your well-being as if you were to be financially well-off.”

She stresses that this doesn’t mean people with less financial means aren’t happy or can’t be happy. But it can be more challenging to feel happy compared to someone well-off.

Kristin Anderson, LCSW, a licensed psychotherapist and founder of Madison Square Psychotherapy, notes that the idea that money can buy happiness is often deeply engrained in many societies.

“These societies often equate financial success with a good life, and it can be easy to get caught up in that idea,” she says. “It’s the idea that financial resources can provide security, comfort, and opportunities, which are all associated with happiness.”

While money certainly does allow people to afford necessities that can improve their quality of life, such as healthcare and education, Anderson says these are no guarantee of greater happiness. 

Whitmire explains that modern consumer culture has a role in creating this idea. By promoting the idea that buying goods and services can make us happier, we’re more likely to believe that having more equals being more fulfilled. 

Dr. Wijesekera notes that our own hard-wired tendencies help fuel these beliefs. Even when we are comfortable, we might think we’d be even happier if we just had a little bit more, whether it’s a new car, a better job, or a bigger house. (Hint: it doesn't).

The Relationship Between Money and Happiness

Money alone doesn’t bring happiness, but researchers have found evidence supporting the connection between financial security and increased happiness and well-being.

According to a 2010 study, higher income does indeed help increase subjective life satisfaction as money can help alleviate emotional pain associated with challenging life events like divorce and poor health. Other research supports the link between financial security and happiness. In fact, studies show that security is particularly connected to happiness in societies where financial instability is more common.

A recent 2023 study has added another layer to this age-old debate by suggesting that higher income levels are connected to increased happiness.

That said, researchers do note that money isn’t the only factor contributing to happiness. But money undoubtedly plays a huge in creating security, access to resources, and growth opportunities, all of which impact your overall well-being. 

The Limitations of Money in Achieving Happiness

It’s tempting to think that earning a bigger paycheck will be the secret to a fulfilling life. But try not to hinge your happiness on your bank account. Having more money may help increase happiness, yes, but can also bring about diminishing returns if the pursuit of extra cash affects your quality of life.

We like to think that money solves all our problems, but the pursuit of financial rewards can be more harmful than good, especially if it costs us healthy relationships and social connections. Sure, having extra cash would be great, but if it means sacrificing meaningful connections with others, are the benefits even worth it?

Our emotional health and well-being thrive on strong relationships and social interactions. What good are financial rewards if they're overshadowing your relationships and experiences?

I know money solves a lot of problems, but it can't buy a sense of purpose and meaning. Think of it like this: if your job is financially rewarding but emotionally draining, burnout is inevitable. You can't appreciate all your hard work and reap the financial benefits if you're emotionally and mentally exhausted. And no amount of money can make your brain or body feel any less tired.

The Role of Money in Different Aspects of Life

The ability to afford what we want and need is often linked to a higher quality of life. Feeling financially secure can reduce anxiety since you’re less worried about how you’ll pay for life’s expected and unexpected expenses.

“We know financial stability also affords improved access to healthcare, leisure activities, and opportunities for personal growth, all of which contribute to better mental and emotional well-being,” Dr. Wijesekera says.

Financial stress can leave you in a constant state of fight or flight mode, she adds. Access to more money and resources shifts you from survivor mode into a space where you can focus on hobbies, friends, or things that make you happy.

In other words, not having to stress about money is what contributes to happiness the most.

“Imagine the difference between constantly feeling stressed about finances versus having peace of mind knowing your needs are met,” Anderson says. “While money itself is not a direct source of happiness, the security it provides can create a more stable environment for mental health to flourish.”

Strategies for Finding Happiness Beyond Money

There’s no question that financial security can offer comfort and ease stress, but it’s also true that the things that bring us happiness are immaterial.

Some research-backed ways to bring more happiness to your life (that, fortunately, don’t cost money):

Cultivate Positive Relationships

Research has consistently shown that having strong, supportive relationships is essential for mental health and life satisfaction. One 2023 study, in particular, found a significant positive relationship between social support and increased happiness.

Focus on cultivating stronger relationships with your family, friends, and community to gain greater emotional support and a sense of belonging. “Engaging in meaningful interactions and shared activities with loved ones can create lasting memories and strengthen bonds, leading to a sense of fulfillment and happiness that material possessions often cannot match,” Whitmire says.

Dr. Wijesekera suggests building a supportive social network by participating in free community events, joining support groups, or volunteering.

Find Meaning and Purpose

Pursuing a sense of purpose and meaning in your life can also play a pivotal role in your happiness and life satisfaction.

Interestingly, some research suggests that feeling a sense of purpose might be connected to financial success as well. In one study, people who felt a sense of purpose in their work earned more money than those who felt their work lacked meaning.  (Of course, earning more might also help make your work feel more meaningful, too). 

Some experiences like hobbies, volunteer work, and engaging activities can help you find purpose. Dr. Wijesekera suggests exploring inexpensive or free hobbies such as drawing, reading library books, and cooking new recipes. Being open to new experiences can bring a profound sense of fulfillment and meaning that will ultimately help you feel happier.

Practice Gratitude

Gratitude can be a powerful antidote to feelings of sadness and negativity. That’s because regularly reflecting on the things you love and appreciate can help shift your focus away from what might be lacking. Research has found that gratitude interventions such as gratitude journaling increase positive moods, subjective happiness, and life satisfaction.

“Taking time each day to appreciate the good things in your life, big or small, can shift your focus from what you lack to what you have,” Anderson says. “By acknowledging the positive aspects of your life, you can significantly boost your mood and overall well-being.”

Practice Mindfulness and Other Self-Care Strategies

Mindfulness and other self-care practices are powerful tools for fostering better emotional well-being. Mindfulness centers on being fully present and engaged in the present moment without worrying about the past or future.

One study found that mindfulness was associated with various positive outcomes including higher levels of happiness and decreased anxiety and depression. Other self-care activities like meditation, exercise, and adequate sleep are also low-cost or free ways to enhance happiness.

Dr. Wijesekera recommends trying free apps or online videos to learn meditation techniques. She also says that simple mindfulness exercises like deep breathing and mindful walking can be beneficial.

Spending Time in Nature

Dr. Wijesekera recommends spending time outdoors in nature to help alleviate some of the physiological effects of stress. She points to research on the Japanese practice of shinrin-yoku or “forest bathing.”  This report found that spending just 20 minutes walking outdoors can lower your heart rate, blood pressure, and cortisol levels (a stress hormone).

Help Others

Anderson also recommends volunteering and finding ways to assist others in your life. “Volunteering your time or doing something kind for someone else can be incredibly rewarding,” she says. “It strengthens your sense of community and purpose, and seeing the positive impact you have on others can be a great source of happiness.”

Takeaways

The answer to the question of whether money can buy happiness is, well, complicated. Research shows that money can alleviate stress and improve life satisfaction. But those benefits will start to taper off after a certain point. A higher income level provides financial security and access to resources and opportunities but doesn't guarantee enduring happiness.

Happiness isn’t just about what’s in your bank account. Finding happiness is an ongoing process that involves many facets. And while there’s nothing wrong with pursuing financial well-being, don't sacrifice your mental health in the long run. Instead, find a balance between your financial pursuits and relationships and experiences. That, we say, is the best approach for unlocking lasting happiness.