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Key points
- Research finds that people with higher incomes tend to report more positive feelings.
- Research shows the happiness value of spending money on others, creating experiences, and dedicating time to enjoyable activities.
- Most people naturally become happier in the second half of life.
For years, psychology research seemed to back up the old saying, "Money doesn’t buy happiness.” But since then, the picture has grown more complicated.
Once you reach the point where you don’t have day-to-day money worries, some research has found more money won’t increase your day-to-day happiness. However, later work, drawing from in-the-moment reports on emotions for more than 33,000 participants (they used an app called “Track Your Happiness,” with several randomized check-ins a day) found that people with higher incomes reported more positive feelings—and there was no cut-off where that was no longer true.
The answer may be that money does buy happiness, even after you’re securely covering your bills. That’s because people with more money tend to have more opportunities to make happiness-boosting choices. Much research demonstrates the happiness value of spending money on others, creating special experiences, and dedicating time to activities you enjoy. Money helps you do all of these.
But not necessarily. If you fall into the trap of nonstop work for a high income, you will be time-poor. You might be able to give to charity but won’t be able to pursue your hobbies. On the other hand, some of us with relatively low incomes could be doing more for others or spending our money on special activities. That’s where your choices come in.
Wait, what about a fancy car and big TV? Won’t that bring happiness? Not if you take the new TV for granted within months, according to Sonja Lyubomirsky, a professor of psychology at the University of California, Riverside, and the author of The How of Happiness. Most people tend to move on to the next desire. To fight that tendency, we need to consciously cultivate gratitude for what we have.
To boost happiness, here are some expert tips from the authors of Happy Money: The Science of Smarter Spending, professors Elizabeth Dunn and Lara Aknin of the University of British Columbia and Michael Norton of the Harvard Business School.
1. Buy Experiences
Whether it’s learning to quilt, diving with dolphins, or time with grandkids, pursue activities and experiences you enjoy. If you like to cook, investments in a fancy kitchen may be rewarding, but if you have to choose, you might do better if you take courses in cooking different cuisines. Try volunteering at soup kitchens.
2. Make It a Treat
Don’t eat out every day if you want to appreciate restaurant food. Instead, go to a restaurant that you consider special for special occasions.
3. Buy Time
Don’t accept the well-paid promotion if the thought of the hours makes your heart sink. Being short of time is a kind of poverty. In one classic study, commuters experienced lower overall well-being than people in similar circumstances without long commute times. Living nearer your work boosted happiness, though it might be more expensive or mean a smaller home. Nowadays, you may be able to work remotely, but don’t underestimate the value of light conversation with colleagues, which also is linked to happiness. Can you get a hybrid schedule?
4. Pay Now, Consume Later
Anticipation is sometimes the best part of any experience. You can maximize this effect by paying for purchases in advance. You’re likely to spend less and enjoy your spending more. Racking up debt, on the other hand, is likely to stress you out.
5. Give to Others
It may surprise you to hear that for nearly all of us—not just saintly folk—the happiness boost that comes from giving to others beats treating ourselves. It’s smart to give in ways that are proportional to your income, but in studies, even those who were struggling to make ends meet experienced a happiness boost after helping others.
Ultimately, the emerging science of well-being suggests happiness isn’t about the things you have but about how you feel day to day. Being kind to others (not just spending money on them) is a happiness booster.
6. Take Care of Yourself
Much research shows that getting enough sleep and exercise are linked to a positive mood. If you think you don’t have enough time, ask yourself if you can drop goals or obligations that aren’t in your best interest.
Eating well is also linked to well-being. We think that sweets make us happy, but research has found that eating fish, fruits, and vegetables boosts mood. Take the time to prepare healthful meals and connect with friends and family.
If you feel your financial life is too difficult for you to take advantage of any of this advice, at least for now, here is something to hang onto: Most people naturally become happier in the second half of life. That may be because they now have more time or choose to focus more on what’s called “the simple things in life.” But you’re likely to get there. All over the world, in rich countries and poor ones, people get happier sometime after 50.
A version of this piece appears at Your Care Everywhere.
