If I only made more money, I would be happy. Most of us have had this same thought as we try to make it through each day. Money is how we survive in the world. It allows us to buy necessities like shelter, food, and water. Money also provides many opportunities like travel, concerts, and other experiences that bring us happiness. So, it would make sense to equivocate money with joy. But does money really have the power to change how we view our lives?
First, it’s essential to acknowledge that happiness absolutely increases when people make more money, up to a certain point. Depending on your area’s cost of living, this point can change dramatically. For someone living on or below the poverty line, more money can drastically improve their quality of life. Even for those above the poverty line, having access to more opportunities, better food choices, and better living situations improves happiness.
Additionally, money can provide safety and freedom to those who need it. For example, survivors of domestic violence or asylum seekers.
Can money buy happiness?
A study from the University of British Columbia surveyed students twice: once before graduation and once after. Before graduation, they asked students whether they prioritized time or money. Most students (60%) valued their time more than they valued money. A year after graduation, those same students were asked about their happiness levels. Those that prioritized money were significantly less happy.
However, it’s not that simple. Money does not inherently change how we feel about our lives, but the freedom and choice allowed by money does. The New York Times shared a story about a Haitian woman who lost her wealth during the 2010 earthquake. After sharing her story, a crowdfunding campaign sent her $4,000, which happens to be several years’ salary in Haiti. They write, “When I visited [her] a few months later, I didn’t need any official statistic to tell me that her life had been transformed. She had paid for her aunt’s cancer treatments, sent her children to school and invested in a small market stall that provided a steadier income. She looked years younger.”
So maybe it’s not the amount of money people have that increases happiness, but how they use it.
How to use money to change your life for the better
Money, like most necessities, is a significant responsibility. With more money comes more power and responsibility. People who are intentional about how they wield their money tend to have a more substantial boost in happiness when making purchases.
- Donate and invest
This can be a scary concept, especially for those just starting to build their bank accounts. But remember, you don’t have to give a lot. A few dollars here and there will make a big difference in your life.
The most important part about donating your hard-earned money is to only share your money with causes that you care deeply about. If an acquaintance asks you to contribute to her daughter’s school fundraiser, but you’re not passionate about making sure the school can buy a new gymnasium, then giving her the money won’t improve your happiness. If, however, you are passionate about animal welfare, offering $5 per month to your local humane society will bring you joy.
- Invest in experiences
There is absolutely nothing wrong with purchasing items you love, need, and want, but the investment in experiences has been shown to increase happiness more than buying things. But what can be categorized as an experience and what can’t? For example, purchasing a piece of art and placing it in a room you never enter doesn’t provide you with an experience. But a work of art hanging in your favorite room will give you a joyful experience every time you see it. There are a lot of material possessions that bring us positive experiences every day.
- Improve yourself
Spending money on professional development, therapy, and hobbies will pay off in the long run. These activities are similar to experiences but instead offer an opportunity to make yourself a better person. These types of experiences help us become the people we’ve always wanted to be.
- Spend money to save you time
Cost is relative. When purchasing a larger item like a new couch, we see a service fee of $5 and still move forward with buying the item. Yet, when the grocery store places a $5 pick-up charge on our account, we decide it’s not worth it and instead spend 2 hours picking out our own groceries.
In our busy lives, time can sometimes be more valuable than money. Instead of spending those two hours at the grocery store, the time could have been spent with family, walking the dog, or accepting a second job that would make you a lot more money than $2.50 per hour.
Time is a commodity that we can sometimes take for granted. In 2020, the Harvard Business Review surveyed 15,000 Americans who used their money to save time. The study found that these people showed a 10% higher life satisfaction than those who didn’t.
Money is power and, when used wisely, can contribute to feelings of happiness. But to answer the question, does money really change everything? The answer must be no; it doesn’t. Money is only one part of the happiness equation. Connection, belonging, purpose, rest, and many other variables also contribute to our happiness. So, the thought, if I only made more money, I would be happy, might be accurate, but we might just be simplifying the issue.