Can money really buy happiness? While it’s clear that money is crucial for meeting basic needs, researchers argue that money isn’t the only key to happiness. I read some experts and their studies to see what they had to say about how money affects our happiness.
Money is essential for meeting basic needs like food, shelter, and healthcare. A study by Princeton University researchers Daniel Kahneman and Angus Deaton found that happiness increases as income rises—up to about $75,000 a year. They claim that having enough money to avoid financial stress and afford essentials can significantly improve well-being. However, beyond this income level, earning more money doesn’t necessarily lead to greater happiness (Kahneman & Deaton, 2010).
Although money might not directly buy happiness, it can buy experiences that make us happier. Michael Norton, a professor at Harvard, explains that spending money on experiences—such as traveling, dining out, or taking classes—tends to bring more long-term joy than buying possessions. Norton claims that experiences create meaningful memories and strengthen relationships, which are critical for happiness (The IKEA effect – Norton, 2011).
Even though money can bring short-term excitement, people often adapt quickly to their improved circumstances. Psychologists Philip Brickman and Donald Campbell describe this as the “hedonic treadmill,” where people return to their previous level of happiness even after positive changes, such as getting a raise or purchasing a new car. This suggests that constantly chasing more money or material goods doesn’t lead to lasting satisfaction (Hedonic Adaptation – Brickman & Campbell, 1971).
Research shows that strong relationships and a sense of purpose are far more important for long-term happiness than wealth. According to Robert Waldinger, director of a 75-year-long Harvard study, close relationships—not money—are the greatest predictor of happiness and health. Waldinger explains that people who feel deeply connected to others tend to live happier and healthier lives (Waldinger, 2015).
Additionally, spending money on others can increase happiness. Psychologists Elizabeth Dunn and Michael Norton found that using money to help others—such as donating to charity or buying gifts for friends—boosts happiness more than spending on oneself. They claim that generosity creates a sense of connection and fulfillment (Dunn et al., 2008).
So, can money buy happiness? The answer is no. While money is crucial for comfort and stability, its ability to truly make us happier has limits. Once basic needs are met, relationships, meaningful experiences, and helping others are what truly lead to a fulfilling life. Instead of focusing just on earning more money, it might be better to think about how to use the money you have to build a happier and more meaningful life.