The Relationship between Money and Happiness


I think that the presented arguments are strong, but they fail to recognize a crucial thing. What do we mean when we talk about the relationship between money and happiness? Do we mean that there is clear causation? No. I believe it has been established that the relationship is more complicated. I cannot say that money will buy you happiness, and, similarly, no-one can say that money does not make you happier. It has been argued convincingly that money can buy you happiness under certain circumstances. But before I elaborate on this point, I would like to stress one more thing.

Having Money vs. Poverty

Some people say that it is not the money that makes you happy but the things you can buy with it. I agree with that. I do not think that there are many people who are happy just because of having a tightly filled wallet. It is not the money that makes them feel happy, although having a tight wallet once in a while may feel good, but the opportunities that the money gives. However, let’s look at it from a different perspective. The statement that money makes you happier is arguable, but it is hard to argue that the absence of money makes you unhappier. Having money means not having to deal with a lot of pressures and sufferings. How incredibly more enjoyable life is, when you do not have to worry about the rent next month or paying the bills or affording the things you need! When you do not have to spend sleepless nights worrying about mortgage or tuition. In these cases, I am not even talking about huge amounts of money that can buy you a luxurious life. I am just saying that having enough money makes one significantly less unhappy.

Can Rich and Poor People Be Similarly Unhappy?

Various academic studies have shown that there is, indeed, a connection between the money you have and your level of happiness, but this connection is not very strong (Lyubomirsky, 2013). However, maybe it is stronger that the previous speakers think. Let me explain what I mean. It all depends on how you ask the question. For example, we can conduct a survey among the populations of two countries: one is developed and wealthy, and the other one is poor and torn by a civil war. We ask people how happy they think they are. And possibly we receive similar results, i.e. similar percentages of people in both countries think that they are happy. A researcher may conclude that the happiness of people of these two countries does not depend on their income or possessions. I beg to differ. A family in a rich country claims to be not too happy because it seems like they will not be able to afford another car for two more months, which means two more months of inconvenience. A family in a poor country is not too happy because today they did not have enough fresh water for all of their children. Ask again: are they similarly unhappy? My point is, although a lot of money does not necessarily make you happier, enough money saves you from the horrors of poverty making you significantly happier than the underprivileged.

Spending Money Right

I am ready to agree that the triumvirate of wealth, income, and possessions is not something that inevitably increases a person’s well-being. But I strongly disagree that money cannot buy you happiness. If one thinks that money cannot buy happiness, they are just probably not spending it right. A study was conducted to find out why money is so weakly linked to happiness, and the findings showed that a happiness-boosting factor is not having money or receiving money but spending money wisely (Dunn, Gilbert, & Wilson, 2011). The researchers define eight principles of spending money, which will make you happier if you follow them.

Happiness-Boosting Principles of Spending Money

First, think about buying experiences, not collecting material possessions. If you can afford a trip, it can make you happier than buying a piece of expensive jewelry. If the money you have can help you help someone else, benefit other people, it promotes happiness, too—this is the second principle. Plan your expenditures in a way that allows you to buy many small pleasures, not fewer large ones. Do not pay for overpriced insurance. Pay now and consume later. Think of what the things you buy can actually do to you besides their main purpose. Do not buy something just because everyone has it. However, pay attention to how certain purchases make other people happy and think if it can work for you as well. Several experiments have shown that people who do not follow these principles do not feel that having money and spending it boosts their happiness. But people who do follow the principles recognize that being able to afford exciting experiences, help for the others, and small pleasures every day, in fact, makes them happier. Dunn, Gilbert, and Wilson (2011) concluded that “money can buy many, if not most, if not all of the things that make people happy, and if it doesn’t, then the fault is ours.”


I would like to conclude that money does not only make one happier than he or she would be without it, but also, if the money is used wisely, it can, indeed, buy happiness.


Dunn, E. W., Gilbert, D. T., & Wilson, T. D. (2011). If money doesn’t make you happy, then you probably aren’t spending it right. Journal of Consumer Psychology, 21(2), 115-125.

Lyubomirsky, S. (2013). The myths of happiness: What should make you happy, but doesn’t, what shouldn’t make you happy, but does. New York, NY: Penguin.

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Premium Papers. 2023. "The Relationship between Money and Happiness." January 3, 2023.

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Premium Papers. "The Relationship between Money and Happiness." January 3, 2023.