The relationship between money and happiness according to science

The relationship between money and happiness has been an issue studied by sociologists, psychologists and economists. We find ourselves in a society aimed at obtaining economic status. Thus, Knowing precisely whether it is money that leads us to happiness is a juicy question.

The most interesting thing in studies on the relationship between money and happiness is to overcome exceptionalities and find general rules that are repeated over and over again in different societies. Likewise, it is important to know what role money normally plays with our life satisfaction in a capitalist society.

The most interesting studies precisely point out the difference between having money only to cover basic needs or having money as an option for power in society. This is a gap that almost all the results of studies between money and happiness are based on.

Money and happiness: having to cover basic needs, necessary for well-being

One of the first theories between the relationship between money and happiness was described by Richard Easterlinwho worked as an economics professor at the University of Southern California.

Professor Easterlin found that countries with higher average incomes are generally happier than countries with lower average income levels. As long as citizens have enough income to meet their basic needs, they will be happy.

Easterlin argued that life satisfaction increases with average income, but only up to a point. Beyond that, the marginal gain in happiness decreases. Simply put, the happiness-income paradox is this: at one point, both between nations and within them, Happiness varies directly with income, but over time, happiness does not increase when a country’s income increases.

What exactly is “happiness”?

For authors like Daniel Kahneman, Happiness can be defined in terms of “emotional well-being” and “positive evaluation of life.” In turn, emotional well-being is understood as the everyday feelings that a person experiences, such as happiness, sadness, stress or anger. Life evaluation refers to what perception people have about their lives when they reflect on it.

Having more money buys life satisfaction, but not happiness; while low income is linked to both low emotional well-being and a low evaluation of life.

The peace of mind of having basic needs covered has more to do with human rights than with the scope of the feeling of happiness. Obviously, if you do not have basic needs such as shelter or food, it will be very difficult to have peace of mind and, therefore, a feeling of general happiness.

More findings on the link between money and happiness

A study by Elizabeth W. Dunn, Lara B. Aknin and Michael I. Norton published in 2008 in Scienceconcluded that Money buys happiness, but only if it is spent on someone else. The survey found a direct correlation between the amount people spent on gifts to others and an increase in their feelings of accomplishment.

For their second study, the team surveyed employees at a company who had just received profit-sharing bonuses. The amount of this bonus that workers spent on others predicted happiness six to eight weeks later, while the portion of the bonus they spent on themselves had no effect on their happiness.

In their third study, the team gave research participants $5 to $20 and instructed them to spend the money on themselves or others. Then his happiness was determined. The study found that those who spent theirs on others were happier than those who didn’t.

Money and happiness: it’s not how much you earn, but how you spend it

While researchers may have looked at various angles to this age-old question, what is generally accepted from all that research is that Happiness does not depend so much on how much you earn, but on how each person chooses to spend it.

Can we then say that happiness is bought with money? Well, maybe that can happen if you spend it well.

In your own experience, you must have noticed that getting a raise or bonus didn’t make you happier in the long run. The initial euphoria quickly dissipates as you get used to the new pay.

Buying a new smartphone or the latest trending gadget didn’t do much for your happiness. That doesn’t mean that it doesn’t give you joy, but it has nothing to do with medium-long term happiness.

Keys to spending money as an investment in well-being

There are some ways you can spend moneybacked by science, that are guaranteed to provide longer-lasting pleasure:

Buy more time

A UCLA study of 4,400 Americans showed that People who value time more than money are generally happier than those who do not believe that having more time is better than having more money.

Imagine being able to hire a virtual assistant to handle those mundane tasks that keep you stuck or any other service that can free up your time. Free up time to spend on the things that really matter to youlike spending time with family and friends or just going for a walk with your dog and watching the sunset.

Spend on a dream experience

People mistakenly believe that buying things that last longer and even appreciate in value will keep them happy much longer than experiences. The truth is, you quickly get used to the new winter designer boots you once became obsessed with. While you may still enjoy wearing them, that initial burst of happiness you experience the first few weeks quickly fades.

However, A great experience like a vacation on an exotic island will remain in your memory for life. You will always remember those moments as a wave of pleasure. Experiences may be fleeting, but the joy they bring will last a long time. It is the type of sensations and memories that can pull you out of a pit of sadness and drive you to fight to have a similar experience.

Spend with friends and family

You will feel greater satisfaction when you dedicate time and money to the people you really care about. We are all social animals and having healthy relationships with others is essential for our physical and mental health.

Spending money on experiences is more rewarding because we usually share good times with a spouse, friend or family. Even shopping for things together is more fun than doing it alone.

Why does spending money on others make us happy? Psychologists say it’s because it makes us feel good about ourselves. Giving to others enhances a loving and generous image of oneself that makes us happy. Giving to others helps us connect more with them and people with strong social ties are generally happier than people without them.

Having money to some extent contributes considerably to feelings of well-being. But beyond that point, More money does not necessarily translate into a happier person. However, with conscious and correct spending, money can buy a lot of happiness.

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