I’ve seen facebook statuses that state “money doesn’t buy happiness” or images like the above. Is there more to this idea, or is this the definite truth that people firmly believe in? As we look around, most people are striving to reach to the top of their careers, and workers with entry-level jobs go back to school for higher education, because they know higher education brings higher returns. It seems like we are all focusing on making more money for a huge purpose.
Does more money —> more happiness?
In my opinion, it definitely does. It really depends how you use that money (materialistic things vs rich experiences.) The returns also level off. Let’s move back to the very beginning. A person who desperately needs shelter and food would not be happy unless they fulfill those basic needs. Therefore, money brings happiness in that extent. What happens when basic needs are fulfilled?
Buying materialistic things like a new car or trendy clothes would sort of bring more happiness to our lives, since wearing trendy clothes makes us more confident to meet others, and in turn, we make more friends. Confidence in ourselves is key to meeting new people. That is why lonely people usually continue to stay lonely, because since they are not confident in themselves in making friends, they appear inapproachable to others. Being the social animals we are, we need friends to maintain our well-being. Studies have shown in the past that those who interacted with friends when they’re sick healed faster (less mucus on tissues as time goes by) relative to others. So, materialistic things—>confidence—>friends—>happiness.
On the other hand, what really increases happiness is spending money on rich experiences. This has to do with the Self-Determination Theory by researchers Ryan and Deci. Self-Determination Theory tells us that as long as three basic psychological needs (autonomy, competence, relatedness) are satisfied, the person is happiest. Spending money on experiences, in which we can enjoy, would help fulfill these needs. Person can feel competent by being able to use their talents to master new skills and autonomous when their actions are chosen by themselves. A person feels relatedness when they feel what they are doing increases supportive relationships.
More money does buy more happiness, as long as you use the money correctly. However, it starts to level off (every extra dollar brings more happiness but less each time.) There’s a cost to earning more money, and that could come from having more responsibilities (i.e. managing more workers.) More responsibilities would cause more stress. Still adding to happiness, but less and less!