They say that money can’t buy happiness…
…or can it?
A recent study showed that money can buy happiness, but only a certain amount. We can call this a baseline level of happiness.
The researchers concluded that the ideal income for individuals is $95,000 a year for life satisfaction and $60,000 to $75,000 a year for emotional well-being, with families with children needing more.
What happens after that level of income is reached?
The study went on to conclude that once that threshold is reached, further income is actually associated with reduced happiness.
What this means is that money is only a part of what makes us happy. If we’re really unhappy to our core inner being, then there are limits to how happy money can make us.
So what are the reasons why money can’t buy happiness…or at least more happiness above that baseline threshold?
First of all, we need to take a step back.
What exactly is happiness anyway?
Is it a car, a house or a big screen TV? Buying a new car feels great at first. But months and years later, it’ll just be a car. The bright, shiny, newness eventually wears off and then you’re back to where you started. Or you’ll want more.
We probably don’t need a dictionary definition of happiness, right? It’s a feeling. If someone asks you if you’re happy, you usually can give them an answer right away. We often use “happiness” to describe a range of positive emotions, including joy, pride, contentment, and gratitude.
To me, happiness is contentment. Content with what you do have in your life. Not focused on the things that you don’t have.
True, authentic, genuine happiness is about relationships, self-development and experiences. Look at the proven ways to increase happiness. How many of these involve buying material things?
So let’s take a deeper look on exactly why money can’t buy happiness.
1. The Hedonic Treadmill.
The hedonic treadmill is the observed tendency of humans to quickly return to a relatively stable level of happiness despite major positive or negative events or life changes. According to this theory, as a person makes more money, expectations and desires rise in tandem, which results in no permanent gain in happiness.
Think about the last time you made a major purchase. What happened when you finally got that new car? How long did your happiness last? Not very long, right?
You may think that you will really be happy when you buy that shiny new car, but then your neighbor got a nicer one and now you want that one. This is the power of adaptation. The new wears off quickly and we move on to wanting something else which we think is going to make us happier.
A classic study on this topic is titled Lottery Winners and Accident Victims: Is Happiness Relative?
The researchers wanted to see how people adapted to happiness. What they found was fascinating.
They interviewed three groups of people: lottery winners, paralyzed accident victims and a control group.
Initially after winning a pile of money, the lottery winners had an increase in happiness. Makes perfect sense. And immediately after their accident, the victims were angry. This also makes sense.
Here’s where it gets interesting: within ONLY two months, both groups had returned back to their average level of happiness.
That’s the hedonic treadmill – we all return to our baseline level of happiness, even when something awesome or tragic happens in our lives. The 6 other tips below will give you even more insight on why money can’t buy happiness.
2. True Happiness Comes From The Inside.
Maslow’s Hierarchy of Human Needs represents our human needs, with the ones at the bottom being most necessary, then building upon those. At the base is physiological (food, water, air, sleep), and at the top is self-actualization- realizing your full potential as a person.
Money can help you purchase the physiological and the safety levels of the hierarchy. But as you move up the layers of the hierarchy, these are our human needs that money simply can’t buy: love/belonging, self-esteem and self-actualization. If you do try to buy them, they’re hollow and meaningless.
The bottom of the hierarchy supplies our external needs, which money can buy, then moves up to the intrinsic needs of the heart, mind and soul. As you go up the hierarchy, the less money will help you.
3. Money Can’t Buy Authentic Relationships.
At the end of the day, even wealthy people crave authentic human connections. Time and time again, we see examples of the rich and famous being miserable. They are not happy in their love lives, family lives and oftentimes, in their careers.
Think about your closest friends. The ones you turn to when you’re going through a challenging time. You might be sad, anxious or depressed. A friend can make you smile or laugh. They can turn your mood from gloomy to sunny. Money doesn’t buy that.
Your relationship with your spouse also has an impact on your happiness. We probably all have friends who are in joyous, thriving marriages even with lesser money in their bank accounts, while other marriages are filled with arguments, and a lack of love and trust despite millions in the bank.
Having a lot of money doesn’t mean you’ll have a lot of authentic, fulfilling relationships in your life.