We’ve all heard that money can’t buy happiness. But is there some sort of relationship between money and happiness? And if so, what does that look like, and can money facilitate happiness?
Meeting basic needs
Clearly, it takes money to meet our most basic needs like food and shelter. When those basic needs are on the line, it’s not surprising that this could potentially trigger mental illness. According to the Money and Mental Health Policy Institute, people with problem financial debt are twice as likely to experience depression than those without financial difficulties. Problem debt is also a risk factor for suicide.
Mental illness, particularly more chronic illness that affects the ability to work, can have a significant detrimental effect on finances. Income may be erratic, and qualifying for disability can be a difficult and drawn out process. Paying for medications and health services can be a huge drain. The Money & Mental Health Policy Institute says that 1/4 of British adults experiencing mental health problems also report problem debt.
I think at the low end of the income spectrum, it’s not about money increasing happiness; instead, it comes down to having a sense of security rather than the constant uncertainty about meeting those basic needs. In terms of Maslow’s hierarchy of needs, having sufficient income security to meet basic physiological and safety needs is essential. That being said, money alone is not necessarily enough to ensure those basic needs are met, but having some form of universal basic income could play a role in meeting some of those needs.
How (some) money can facilitate happiness
What happens at the higher end of the income scale? A study published in Nature in 2018 concluded that globally, a yearly income of $95,000 was the average point at which life evaluation relative to income topped out. The satiation point for emotional well-being was $60,000 to $75,000 per year. Income above those levels was not associated with any further improvements. The exact amounts varied from region to region; in North America, $105,000 was optimal for life satisfaction.
I don’t believe that there’s a direct relationship between money and happiness, and while figures like these can give some indication of where money stops having a positive influence, income alone certainly can’t predict someone’s level of happiness. Once the basic needs are met, our attitude towards money and how we choose to use it can grease the wheels a bit on the journey towards happiness.
Material good vs. experiences
We live in a world with a strong consumer culture, and I have strong doubts about whether buying stuff can contribute towards happiness. Yet I can see how people might turn to consumerism for a quick hit of temporary happiness in an attempt to compensate for a lack of happiness at a deeper level.
One thing that money can potentially do is open doors for amazing experiences. Whether it’s travelling the world or putting your kid in the ski camp they’re super excited about, money can facilitate happiness by allowing us to do things we wouldn’t be able to do. Of course, this isn’t the only way to be happy, and there are many wonderful things to do that cost nothing at all, but in this sense, money can open up possibilities.
Money can also allow us to help others in larger-scale ways, and doing these kinds of values-consistent actions can promote greater overall joy.
So, to answer my question in the title, can money facilitate happiness? Well, I chose that wording specifically because I would give a qualified yes, I think that in some cases money can facilitate (but not directly lead to or produce) happiness when the right mindset is already in place. What are your thoughts?
The COVID-19/Mental Health Coping Toolkit page has a wide range of resources to support better mental health and wellbeing.