Money Can Buy Happiness

When we imagine having more money, we normally picture ourselves waking up as millionaires. It’s a sweet thought, since our living conditions, our wardrobe, our vacations, and even our social status are immediately transformed. This thought of increased material well-being does, in fact, bring us a certain amount of satisfaction and happiness.

If money wasn’t influential in one’s level of contentment, psychologists and psychiatrists wouldn’t inquire about income when analyzing their depressed patients.

The bottom line is: money does help.

But, it doesn’t help as much as we think it does. In North America, the famed threshold is around $75,000. All additional income above and beyond that number raises the smile factor quite insignificantly.

So money does help, but not as much as we think it does.

Dr. Elizabeth Dunn is a professor in the Department of Psychology at the University of British Columbia, and co-author of “Happy Money: The Science of Smarter Spending”. She often writes and speaks about the relationship between money and happiness, with a particular focus on our difficulty in being able to truly identify what will bring us the most happiness.

Dr. Dunn argues that rather than buying things, we should look to purchase experiences.

It’s no surprise to hear such an assertion, especially in the age of young professionals quitting their jobs to travel the world and experience never-before-seen cultures and personalities.

The root of her thesis lies in the fact that investing in experiences allows you to spend your money on living your life with others. As much as we love those nice shiny objects, money spent at the service of our relationships is what has proven to bring the human heart greater mirth.

Build your financial plan wisely, and set your eyes on the trips you want to take, and things you want to buy. But make sure that your first priority is identifying with whom you want to share those things.

Experiences provide for the greatest of memories, and unlike a lot of material things, our memories are the only things we can take with us absolutely everywhere we go.