Can money buy happiness? Surprisingly, the video below claims science says it can, if the money is spent in just the right ways.
Over the years, most people have heard again and again that money can’t buy happiness. But what does science have to say about it?
Studies have shown that human beings react strongly to change. More money in the form of a commission or a raise does increase a person’s happiness temporarily. However, the speed of adaptation is quite fast, and the joy of extra money wears off fast too. Research suggests that any income beyond $75,000 a year fails to increase someone’s level of happiness. Lottery winners even report high levels of unhappiness. They end up spending all their winnings, taking on debt and wrecking relationships with friends and family members.
Happiness Comes From How Money Gets Spent
Recent studies show that money can in fact buy happiness, but only if the money is spent properly. It’s been demonstrated clinically that people who spend money on other people feel happier. People who spend money on themselves don’t tend to feel less happy, but neither is their happiness level increased.
By the same token, when large organizations like corporations write big checks to give money to charity, the happiness level of its employees doesn’t change. By contrast, when a big company divides money up among its employees and lets them choose where their portion of the charitable contribution will be donated, employees do report increased happiness.
Similarly, employees that spent company incentive pay on each other instead of on themselves reported not only higher job satisfaction, but also higher sales figures and increased team performance. This effect has been demonstrated in sales departments and sports teams alike.
Spending money on others seems to increase happiness across cultural and national boundaries. It doesn’t seem to matter how the money is spent. Small gifts and major charity efforts seem to give the spender’s happiness an equal boost. Emotional rewards from spending money on others have even been detected at the neural level.
People Who Spend Money on Themselves Are Happiest if They Buy Experiences
People who spend money on themselves do report increased happiness levels provided they spend on experiences instead of material things. Attending an event or spending money on travel seems to boost happiness more than buying an object. Many frequent small pleasures can help increase happiness on a daily basis.
The video suggests that rather than purchasing a $3,000 rug, spending $5 on a latte with friends periodically can create a different experience each time. This in turn can create hundreds of opportunities to boost a person’s happiness for the same amount of money.
The video concludes that money isn’t likely to become the main driving force for happiness in anyone’s life. However, money does make certain things easier and can in fact buy happiness, as long as it’s spent correctly.