Can Money Buy You Happiness? Maybe.
As the saying goes, "Money can't buy you happiness"—and there's a decent amount of science to back that up. Research generally finds that money only improves your overall satisfaction with life up to a certain point. On average, that point is $75,000—although it varies form state to state based on cost of living.
"Money is kind of like health in that to a very large degree it affects us more in the negative," happiness expert Gretchen Rubin said in a recent episode of her podcast, Happier. "Not having health, not having money—you’re very aware of its impact on your happiness. But then once you have it, it’s easy to take it for granted."
But once your basic living expenses are covered and you don't lie awake thinking about credit card bills you can't pay, there are still ways to use your money to increase your overall happiness level. Here's how:
Buy things for other people.
Kindness and altruism are important qualities for most people, and studies show that buying things for others makes us happier. When your boyfriend or girlfriend shows up with a bouquet of flowers "just because," it's nice for you—but it also feels good for them.
"While buying 'stuff' won’t bring you happiness, buying things for others can," says psychotherapist Elizabeth Lombardo, Ph.D., author of Better Than Perfect: 7 Strategies to Crush Your Inner Critic and Create a Life You Love. "For example, when people spent their work bonus on someone else, independent of how much money they spent, they felt happier. What’s more, investing in experiences, such as a family vacation, can help increase your happiness."
Use your money to invest in your relationships.
Think that new pair of designer shoes or that shiny car will make you happier? Maybe it will for a few months, but if long-term happiness is the goal, you're better off investing that money in your relationships with other people.
"Money can buy you that plane ticket to visit [someone you love]," says Rubin. "Or you can have a baby sitter for a date night, or a Super Bowl party with your friends, or a reunion. These things can help you keep relationships strong, and money can help you do those things. Is money something that’s essential to developing strong ties to other people? Is it essential to helping you challenge yourself? No. But it can make it easier if you are spending your money wisely."
Use money to save time.
According to a study published in July in the Proceedings of the National Academy of Sciences, putting your money toward saving time could be an excellent use of it. More specifically, putting your money toward tasks you dread doing yourself—like cleaning your apartment or cooking—could contribute to happiness.
"One way to spend money to get more happiness is to pay people to do chores you don’t want to do," says Rubin. "What they saw is that people who use money to save time are happier. It's interesting to think, 'OK, I have a limited amount of money, how can I spend it?' What you spend your money on makes a difference in how much bang you get from it."
Remember, spending your money on plane tickets to see your friends and hiring a house cleaner isn't essential to happiness—but they're certainly worth keeping in mind the next time you're getting ready to pull the trigger on that expensive handbag.
When it comes to money, do you know what makes you happy? If not, give this a read.