Scientific evidence has shown us that in fact, money DOES buy happiness, but only to a certain point.
A famous Princeton study (linked below) found that emotional wellbeing increases steadily with income, up to around $75,000 per year. After that point, income does not have much of an effect on emotional wellbeing.
Research has previously shown that low income families are more likely to divorce than higher income families (see NCFR link), and that lower income couples were more likely to have their relationship negatively influenced by money problems. Together, these facts suggest that conflict within low income families can often relate to money problems, leading to unhappiness and divorce at higher rates than high income families.
The Princeton study has found that low income families also experience more emotional distress from unfortunate life events (which include poor health and loneliness as well as divorce) than do higher income families.
With that said, it seems clear that $75,000 for a family isn't really all that much money. Two parents earning just over $37,000 per year will earn that much (which works out to around $18 per hour per parent working 40 hours per week). Clearly, though, a single parent earning that salary will earn far below the 'happiness threshold', and will suffer from many of the financial troubles experienced by low income families.
Essentially, I think the data shows us that money can buy happiness if you are in poverty or struggling with money. In this case, the money will eliminate several sources of unhappiness, such as stress and marital conflict over finances. But once you have a comfortable family income: enough to pay for all your fixed expenses (such as rent/mortgage, bills, and groceries) and maybe a few luxuries (movie tickets), money doesn't really have much of an impact on happiness.
Happiness is a feeling we have for many reasons. Many objects and materials can provide the happiness many humans desire. Money can and have fulfilled that happiness which one lacks for many years.
There are many ways I think money does buy happiness. Money increases quality of life in which buys happiness. This is only true if one lives within his means, lives a modest lift style and pursues happiness the right way. I think most people believe happiness is bought in a store. People overestimate how much pleasure they’ll get when they buy luxurious things. We really don’t need all these extravagant luxuries around use. Are they necessities of life? Are they just things to show one’s vanity? Or are they just trying to keep up with the Jones sort of speak. There are different classes of people; welfare, working, middle, and upper class.
The welfare classes are not working or can’t find work; their bare minimal needs might be met. Do you think there is any quality of life for that family? Yes there is some food on the table and they may all live in a small apartment. What about the quality and quantity of those conditions? The working classes are working so hard sometimes 2 and 3 jobs struggling just to get buy. The whole time hoping that some day they could make enough to enjoy some of the good things life has to offer; time with family and friends, traveling, health, quality food and shelter. So yes I believe money can buy happiness if managed the right way.
All things considered, does it make good sense for people in society to pursue monetary income or wealth? I believe it makes sense for people to pursue monetary income first; the wealth will come later. “Happiness is an ongoing project, not something that can be accomplished once and for all by earning more money, marrying the love of your life, having wonderful children (Dunn & Gilbert, 2011). But people adapt too quickly to the benefits that come with wealth and take them for granted. They must continuously pursue happiness of making more money to buy more things.
Happiness is the psychological condition that results from the achievement of one’s values. Values are ends that a person acts to gain and or keep. They are those things that a person cares about having or doing “cares” in the robust sense that he or she is willing to act to secure them. Values can be material or spiritual. Food, clothes, eye wear, a car, a house all of these would be material values. “Spiritual” values are those that pertain to a person’s consciousness. Spiritual values encompass things like knowledge, beauty, self-esteem, mental health or rewarding work. While spiritual values may take material form, their value depends primarily on their relation to the needs of a person’s consciousness.
Money is an opportunity for happiness in today’s society. Many people use money to meet many of their needs. Vanity is now a major factor in the world. Buying materialistic things is an instant feeling of happiness.
Money’s power to expand a person’s options is the heart of its contribution to happiness. An individual might value spending one’s life as a writer but unable to sustain an acceptable income writing. More money and the time it buys, makes a pursuit a greater possibility. A person might value being engaged with their children while they are young, or peace of mind about their retirement; more money makes these possibilities easier.
One of the things these examples make plain is that money is important not only to fulfill physical desires or to acquire material goods. It is also critical for the spiritual values. Money facilitates the achievement of all values, spiritual as well as material.
Money buys good and money buys time. Money buys autonomy to mold one’s life in the image of one’s ideal. Money nourishes happiness by helping a person to achieve the values that happiness is made of. Like many things, money can be put to poor uses. Yet money can also be put to wonder uses, including the greatest: experiences joy in living. That fact has got to be acknowledging if people are to embrace money unapologetically, as they must if they are to attain sufficient control over their lives to realize their ends and fulfill their dreams.
The truth is cliché that money can buy happiness is that happiness is not easy. Money does not offer short cuts around this fact. It is important to appreciate the danger of how money can’t buy happiness, however. On one level it is simply bad advice, which is counterproductive to individual’s happiness.
Economists use the term utility to represent a measure of the satisfaction or happiness that individuals get from the consumption of goods and services. Because a higher income can allow one to consume more goods and services, we say that utility increases with income. But does greater income and consumption really translate into greater happiness?
However consumption effect tells us that more consumption of goods and services will increase happiness. At least to a degree, we see that money can buy happiness. Based on research I found that money does not increase the happiness because as income increases the person behavior of preferences or satisfaction changes and will result is diminishing income. Research also showed that the more money one earned in an annual salary, one will spend more for the desires in which one has.
Happiness can be easily out weighted by the loss of a family member, or cancer that may not be cured or removed. Money brings people happiness in numerous ways. I believe that money can provide one with live. Some people say that without love there is no happiness. On the contrary there is love in money. Others might involve themselves into one life only because the person has money, but they are expressing their love none the less. For example like when a woman falls in love with a man’s personality or anything else she may like about him. The man with a lot of money can lose all his wealth at any time, just like he can lose his personality, a career, looks or even a hairstyle. What people fail to realized is that money can bring happiness, whether or not its material objects.
People tend not to like the phrase “money can bring happiness” not everyone can have a lot of money. Only about 3% of Americans make over $250,000 a year searching happiness through money is not the easiest route. So people tend to simply deny the phrase, by saying that being rich makes people greedy and heartless. People are often frustrated with the rich because while they work diligently, they view the rich as those who sign a couple of papers and can continue to sit in their gold encrusted chairs, resting with their feet in the air. Because of this, the other 97% of the world say that the rich are miserable, as a way to feel better about themselves. Truth is money does bring happiness, one way or another.
In conclusion, evidences suggest that an increase in income and consumption does not appreciably increase happiness. However, due to relative income effect, people still engage in the rat race for making more money. But as a person’s income increases over time, a person’s expectations increase as well, therefore they aspire to having higher incomes. To the extent that satisfaction is tied to whether those aspirations are met, satisfaction may not increase as income grows over time. It is possible that the relationship between income and satisfaction goes two ways; although higher income generates more satisfaction, greater satisfaction offers greater motivation for individuals to work hard and generate a higher income.