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Can money buy happiness?

Categories: Money, Your life

11 comments

One of our members, Lori, wrote an article this week about money and happiness. It’s a topic I’ve given some thought to and the relationship between money and happiness is certainly something that’s been discussed and researched often in the media and academia. Penelope Trunk, one of our regular contributors, wrote a great blog post about this topic, in which she cited research that suggests that above $40,000 money doesn’t do much to increase one’s happiness significantly.

I feel that I can talk about the relationship between money and happiness because I’ve both been poor and made a lot of money. When we immigrated to the US my family lived on welfare for a year. We used food-stamps to buy food, I had 3 outfits to wear to school, and when we went on a trip to Canada my parents and I shared a single room at a Motel 6. Then my dad found a job and slowly things got better financially. Did this make a difference in our happiness level? Absolutely.

When I graduated from college, I moved to New York City and got a job with a fancy consulting firm - I made more money than most people at my age but I lived in a place where many people made crazy amounts of money. Over the next 10 years I changed several jobs, each time raising my income significantly. Before I quit my finance job, my husband and I had a high income and could live comfortably pretty much anywhere else but in New York City, where costs of living were out of control. Our income was 10x what it was when we graduated from college - were we happier? Absolutely not. Yes, it was nice to have some savings and to be able to go on vacation or to the theater once in a while (we still stood in line for 4 hour to get discounted tickets). But did having more money fundamentally affect our happiness level? No.

As I’ve written about here, a few months back I quit my job to launch and run Work It, Mom! full time. I was the main breadwinner, so our income took a significant hit - to make it work, we moved out of New York to a place with a lower cost of living. We are living on a lot less than we did a few months ago. Are we less happy? No. Yes, we stress about money and life would be easier if we could get someone to clean our house every week or get a second car. But would we be happier? I don’t think so.

I am sharing my thoughts on this topic because I hope that they will inspire you to share yours. I think it’s an important conversation to have and I hope we can have it here, at Work It, Mom! Many of us are in two-income families and we work because we have to contribute income to the family. Money certainly factors in our choices of careers and other life decisions. But I’d love to hear your experiences and thoughts on whether you think money can or has increased your happiness?

Please share your thoughts in the comments!



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11 comments so far...

  • I live in Silicon Valley where, similar to NYC, the cost of living here is outrageous. In order to buy a home, I have to continue to work. We cannot afford our mortgage (and still be able to eat) on a single income. When my husband finishes grad school in another year, I hope we can plan for another child and possibly save enough for me to work part-time for a couple of years. A girl can dream, right? So in that one case, I think having enough money to live on one income would provide some happiness. Well, at the very least, some security.

    BirdieRoark  |  August 1st, 2007 at 8:40 am

  • Jonathan Clements wrote an excellent article with a similar theme for the Wall Street Journal (Wall Street Post?), in which he described a sociological phenomenon called “hedonic adaptation.”

    See link: http://www.careerjournaleurope.com/myc/survive/20051006-clements.html

    In short, we always want more, but when we get it, we adapt and then grow unsatisfied again. It’s embedded in our DNA. Look at all the famous rich people who have been littering the gossip pages of late. Wealth. Check. Beauty. Check. Fame. Check. Happiness? No. Yet, I think to myself, gee if I were rich, famous and beautiful, I’m sure my life would be fabulous. It’s all an illusion.

    I know I’m going to sound corny but what I take from this is not a career lesson, but a life lesson. I try to surround myself with fewer material things, and focus on nonmaterial things that matter to me, like family, politics, learning and spirituality. And that’s part of the reason I like to work. It engages my brain.

    Jane  |  August 1st, 2007 at 9:26 am

  • Jane - thanks for pointing out the article - it’s a great one and I’ve not seen it.

    Nataly  |  August 1st, 2007 at 10:00 am

  • As my husband and I continually strive to reach the “next level” - promotion at work, bigger house, nicer vacation, new car- I find myself thinking about this issue often. I feel that we are in constant pursuit of what we *think* will make our lives better.
    The truth is, no matter how much we are making in our current positions (or will make if we land a promotion), we still live states away from best friends and family. Do we travel often enough to see them? NO, because we are concentrating on the next thing and can’t take too much time away from work or we lose ground in the pursuit.
    I do like my job and feel that my work is important, but as a full-time working mother, this is done at the cost of nurturing myself. After a full day at work, we have dinner with our son and then he is off to bed and we are off to clean the house, do the laundry, pay the bills, finish the home project, etc. Then it’s to bed ourselves to rest up for the next day of the same pace.
    The conclusion that I find myself returning to repeatedly is that the pursuit of money isn’t worth it. There begins a vicious cycle of working too many hours to enjoy the things that make us happy, namely spending time with family and friends and developing our personal interests. We have to slow down and create the opportunity to experience that which makes us happy, even if it means less money.
    The money buys the security (food, shelter, clothing), but the happiness must be made.

    Melissa  |  August 1st, 2007 at 10:45 am

  • I think that last line in Melissa’s comment says it very well. Happiness itself isn’t a commodity that can be bought at any price.

    This is a great question to think over. I’m probably going to post a longer answer over in the Q&A section :-).

    Florinda  |  August 1st, 2007 at 12:38 pm

  • I think the relationship between money and happiness is complex. As you mentioned, money can buy happiness if it’s buying you essentials– food, clothing, shelter, even a car & insurance– and the dollar amount, of course, depends on where you live (as Birdie mentioned SF Bay area).

    Beyond the necessities (which for Americans would be about 40K) just buying newer, better, faster “stuff,” won’t make you happier. However, I think using your money to help you attain what’s really important to you (ie: trips to see your family, spiritual retreats, donating to charity) then yes, money does help bring you happiness.

    Sheryl  |  August 1st, 2007 at 4:39 pm

  • This is a topic I have thought a lot about. I have also lived in a high cost area, Santa Barbara, CA and it was not fun trying to scrape by each month. I now live in a lower cost area and it is amazing how quickly you adapt and then look for the next thing. I agree with Jane’s post that we are in a continuous pursuit for more money, more things, we adapt and then move on to the next pursuit. Once those security needs are met, it isn’t the “stuff” that creates happiness. It is the more meaningful things that you have all touched on like friends, family, spirituality, etc. We get used to the cars, the houses, and vacations and always seek out more. Next please! :)

    I love what you said Sheryl about using the money to help you attain the really important things.

    I read about this great exercise this last year of writing down all of the memories from childhood to adulthood that makes you feel happy. It is amazing how they ended up being the most simple of things that one can do on any budget. Sometimes as small as sitting on the front porch on a warm evening watching the fire flies.

    Meri  |  August 2nd, 2007 at 10:18 am

  • I feel compelled to respond to this question because for one thing, I’m older than most of the women who share this Blog site (see, I’m so old, I’m not sure what the right terminology is), and I’ve been struggling with this issue my entire life. I am the “big” earner in my household, (but I use the term BIG loosely), and I commute approximately 5 hours a day to work where I can earn the salary I do. During our life, we have been financially secure, and unwisely didn’t save, but spent like crazy, and are now suffering the consequences as we approach retirement. We’ll manage, because we always do, but the answer to this question can’t be black and white. I believe the bottom line is that NO, money cannot buy happiness - if happiness equals love, but it sure can help you enjoy your life. Good marriages can suffer when there’s not enough money to pay the bills, and if you don’t have a job that provides health insurance and you can’t afford to buy your own - wlel then, you have significant problems. Bottom line….money is necessary! It will enhance everything that’s good in life, but exacerbate the bad if you don’t have what you need to provide for basic needs and a few extra treats along the way.

    Cheryl Feder  |  August 2nd, 2007 at 11:36 am

  • I agree, money does not really bring you happiness. I read something about that a while ago too - that money is a huge part of your overall quality of life, up to the point you can pay your bills. After that, it does not add alot.

    My husband and I were discussing this the other day. 10 years ago we were renting a home, and had just enough money to get by. Now we are doing well, own a beautiful home, and can afford great vacations. But overall, is my day-to-day happiness any greater because of the money in savings or the house I live in? Not at all. My husband and I agreed that how the two of us are getting along, and how our family is doing (kids healthy and doing well, etc.) is a much bigger indicator in how much happiness we feel each day. And that is not affected by the nice ‘things’ we have around us. Gretchin Rubin wrote a great blog posting on “Eight Tips for How Money CAN Buy You Happiness” (http://www.happiness-project.com/happiness_project/2007/07/this-wednesda-3.html) and most of them deal with using the money to spend quality time with those you love. I loved that idea! It is our relationships that bring us joy, not things…

    Anna D.  |  August 2nd, 2007 at 3:02 pm

  • Nataly, thanks for linking to Brazen Careerist. I have done a lot of thiking about the money/happiness equation. For years.

    I think we can intellectualize all we want about how we know money doens’t equal happiness, etc. But all the reaserch about how our brain works says that financial wellbeing is realtive. In NYC if everyone in your kids school makes a seven-figure salary, then there is no way for your brain to not feel like you need more money. None of us is above that. Here’s a good book about it: Stumbling on Happiness, by Daniel Gilbert. He’s been doing research about this at Harvard for 20 years.

    So, anyway, I moved to Madison, WI, from NYC. And I have to say that in my experience, the research reall does hold up.

    Penelope

    Penelope Trunk  |  August 2nd, 2007 at 10:30 pm

  • I think that in general, after a required minimum amount to make life easier to live, money does not NECESSARILY buy happiness. But I also know that I would definitely be happier and less stressed if I knew that I could be home with my girls full-time for as long as I wished (meaning, as long as I felt it was a good thing for them), rather than knowing every day that my husband’s income does not cover all our bills and having me home with our babies is making life tough for our family in practical ways (even as it enriches our family in many other ways). It’s easy to say money does not buy happiness if one has a certain level of affluence, it seems to me. But if you are struggling to pay your mortgage, are not contributing to savings or retirement or a college fund, and are living paycheck to paycheck, more money would most certainly bring more happiness. That’s not to say that the equation holds indefinitely.

    Shannon  |  August 6th, 2007 at 12:05 pm

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