What if Money Does Buy Happiness After All?

By Ingrid Fetell Lee
Money Does Buy Happiness

Money doesn’t buy happiness.

You’ve probably heard this phrase a thousand times, or one of its cousins:

The best things in life are free.

All that glitters isn’t gold.

Mo money, mo problems.

The message, of course, is that while we often desire money and what it can buy, “true” happiness comes from relationships with friends and family, finding a sense of meaning through work and service, and focusing on experiences over things.

On some level, this makes sense. Most people value our relationships with loved ones far more than we value any of our material goods. We know that while a trophy can be purchased, it contains none of the joy of a trophy earned through hard work and performing your best. And on the flip side, we know the hollow feeling of letdown a few weeks after buying something that we once felt so sure would bring us lasting delight.

And yet, there are many times when I’ve struggled to reconcile the idea of “money can’t buy happiness” with real-world experience. Ideally money may not buy happiness, but what if you’re a cancer patient without health insurance who can’t afford chemotherapy? What if you’re a mom who can’t go back to work because childcare costs more than your salary? Or what if you’re an artist who longs to focus on your art, but instead have to work two day jobs to make ends meet? Health, meaningful work, and creative passions are all well-studied sources of happiness. And like it or not, in a capitalist society, money influences how much of each we get.

What if Money Does Buy Happiness After All?

Sometimes I’ve wondered if “money doesn’t buy happiness” isn’t just something rich people say to make themselves feel better about the fact that others are poor. If money doesn’t buy happiness, then they don’t need to feel bad about not sharing their wealth, right?

While sometimes “money doesn’t buy happiness” can be a useful reminder to look at all the good in your life that can’t be put on a credit card, at other times, it feels a little like magical thinking. Money is the currency through which we access nearly every resource in our lives. Money doesn’t only secure better airplane seats and nice clothes. It governs entry to education, healthcare, and leisure. It also dictates the availability of resources that are ostensibly free, such as natural environments. (Just look at the way greenspace is unequally distributed in rich and poor communities, for example.)

When you look at it this way, the idea that “money doesn’t buy happiness” looks less like fact, and more like fantasy.

New Research Suggests Money Does Buy Happiness

The belief that money can’t buy happiness was cemented as truth after a widely publicized 2010 study found that emotional well-being rose with income only up to the relatively modest household income of $75,000. After this point, economist Angus Deaton and psychologist Daniel Kahneman (both Nobel Prize winners) found that happiness plateaued. An increase in income bought no additional joy.

But in March 2023, a new study showed that money can buy happiness after all. Money actually does increase happiness well beyond the $75,000 threshold, overturning the previous research. The researchers found that even among people earning $200,000 or more, additional money continues to yield additional happiness. There does not seem to be a limit on money’s influence on emotional well-being. (The exception, researchers note, is severely unhappy people who are enduring bereavement, heartbreak, or conditions like depression, whose distress may be alleviated by some additional funds, but not beyond $100,000 a year.) Note: this research has been adjusted for inflation.

Adversarial Collaboration

Interestingly, Daniel Kahneman, an author of the 2010 study, co-authored this new study which overturns his earlier work. Kahneman participated in the study as an “adversarial collaboration” with happiness researcher Matthew Killingsworth, whose 2021 study found that there was no limit on money’s ability to increase happiness. The two engaged a third researcher, Barbara Mellers, as an independent arbiter, and worked together to test their competing theories.

After more than a decade of scientific consensus that happiness can’t be purchased, we now have evidence that money plays a considerable role in our overall contentment. As Killingsworth sums it up, “In the simplest terms, this suggests that for most people larger incomes are associated with greater happiness.”

A tweet about Money Can Buy Happiness

Does that mean that happiness is simply a matter of taking high-paying job (even if you hate it) or going on weekly shopping sprees? No, of course not. But what this research does suggest is that we’re naive if we ignore the role that money plays in our happiness and overall well-being.

How Does Money Buy Happiness?

A big balance doesn’t guarantee happiness. After all, as the saying goes, you can’t take it with you. It’s what opportunities money affords and what challenges it helps you overcome that determines money’s influence on your happiness. Here are a number of ways that money can increase your overall well-being and joy.

Money Buys Time

If you’re not quite on board with the idea that money buys happiness, consider instead the role of time. Most people would agree that they’re happier when spending time with friends and family or doing meaningful work than they are doing chores or waiting in line. And it turns out that money can make all the difference in how you get to spend your time.

One reason for this is the “time tax” poor people pay just to accomplish everyday tasks. As Cory Doctorow points out, poor people have to spend more time on transit and travel (taking a Greyhound bus as opposed to just hopping on a plane). To find affordable housing, they often have to live further from their work, so they have longer commutes. They also wait longer for services. That’s in part because providers such as doctors who serve poor communities are often overcrowded and understaffed. Poorer people also are less likely to have job flexibility, meaning they have to take appointments at peak times, increasing their wait.

According to a recent study, the average person from a low-income household spends an hour more waiting for a typical service than someone from a wealthy household, adding up to 73 hours per year of additional waiting.

Research also shows that people who use a portion of their income to buy time are happier. Buying a few hours of a cleaning service, or childcare, or help with a chore you hate are all ways to improve well-being.

We all have a fixed amount of time, and the more time you get to spend on things you enjoy or on cultivating relationships, as opposed to mere subsistence, the happier you are likely to be.

Increased Security and Safety

Money can’t solve every problem in life, but it can solve a lot of them. If you have to get home in the middle of a vacation because of a crisis, having money means you can book a flight at eye-watering last-minute fares without blinking. If your boiler breaks down in the middle of a Nor’easter, having money means being able to pay someone a premium to fix it during the highest demand time of year. If a family member is sick, having money means being able to get them urgent, high-quality care. (And while that shouldn’t be a factor, in the US, it unfortunately can mean the difference between life and death.)

Given that 57% of Americans couldn’t come up with $1000 in case of emergency, and that financial worries have been significantly correlated with diminished mental health, it seems clear that having money can reduce stress, and reduced stress is a core component of emotional well-being and happiness.

Freedom of Choice

Beyond baseline security, money can also facilitate greater choice. When you don’t have to worry about your basic survival, you get to think more about what you want out of life. You can choose where to live and what kind of work you want to do. You can pursue a risky startup or work in the arts instead of working a 9-5.

Having money is no guarantee you’ll get to live out your dreams. And not having money doesn’t preclude you from reaching them. But by increasing the range of opportunities available to you, money increases the chances you’ll get to live a life that aligns with your desires.

Enhanced Health and Wellness

Physical health and emotional health are deeply connected. And there are a number of ways that money facilitates greater health and well-being.

Having money, and living in a wealthier area, increases your access to healthy foods. It also increases the amount of time available for exercise and self-care. It might give you access to a gym or trainer who can help you find exercises you enjoy and that can help you prevent injury. It increases the chances you’ll be able to access preventative medical care, instead of waiting until a problem is acute or chronic.

Living in a wealthier area is correlated with better access to green space and less noise, two factors that strongly correlate with long-term health and well-being. On the other hand, without money, many people are forced to work in conditions that are suboptimal for health, including manual labor that causes repetitive stress injuries, shift work (known to cause a range of issues related to disrupted Circadian rhythms), exposure to toxic substances, and more.

Money also allows you to take advantage of wellness opportunities often not covered by insurance, such as therapy for mental health, acupuncture to reduce pain, or physical therapy. And as already mentioned, money can give access to better-resourced, less-stressed healthcare providers, better medications, and early detection technologies which increase the changes of recovery from certain diseases.

Family Preferences

If you ask me what are the greatest contributors to my happiness, I would without a doubt include my child at the top of this list. But you know what? If it weren’t for money, I wouldn’t have a child at all, and neither would countless other families. That’s because 2% of infants born in the US were conceived with help from Assisted Reproductive Technologies.

And those technologies, they are expensive, running around $25,000 per cycle plus the cost of medications. Even with insurance (and you need a well-paying job to get the insurance that actually covers this), it’s a sizable expense even for high-income people.

Even if you don’t need fertility treatments to start your family, money can still be a consideration around growing it. Birthrates are declining across the Western world, in many cases because the sacrifices required to raise, care for, and educate multiple children have become untenable. In some places, larger families have come to be seen as a status symbol. Families may want another child, but in a country without affordable childcare, it’s hard to find a way to grow their family without making sacrifices that compromise their happiness.

On the flip side, money can also be a factor if you don’t want to have children, or you want to have fewer children. Access to reliable birth control and abortion care is also an economic concern. And having the choice of a large or small family is a privilege often afforded by financial means.

Access to Experiences

The old saw that “the best things in life are free” may be true in the abstract, but often breaks down as soon as you get to the mechanics of daily living. Nature is free, but many of the most beautiful natural places in the world have been privatized, and are only accessible with a hefty entrance fee. Friendship is free, but being by your best friend’s side at her bachelorette weekend has a price tag. Music is free, but getting to see Taylor Swift perform live is decidedly not.

Even if you aren’t the type to accumulate a lot of possessions, money facilitates most of the things you care about in some way, whether that’s the purchase of a mountain bike, gourmet cookbooks, a museum membership, or a hotel room.

Money can also increase the frequency with which you get to experience things you enjoy, increasing moments of joy in the day to day. While a surfer with limited resources might only get to surf on the weekends, one with greater means can afford to live nearer to the ocean and catch waves every morning before work.

Self-Actualization and Growth

If the self-help space often feels privileged, that’s because it is. When you’re just trying to get by, personal growth feels like a luxury. Having time to journal, reflect, go on meditation retreats, and learn new skills are opportunities afforded by greater financial resources.

Some may respond by noting that struggle can be a powerful source of growth, and struggle is more available to those without resources than those who have a cushy, comfortable life. While this may be true, given the choice, most people would prefer to grow gently and by choice, through education and self-discovery rather than hardship. While we can make the best of struggle, few of us would willingly choose it.

The Ability to Live Out Your Values

Money is often painted as the root of all evil, but what if instead we thought about it as a way to live our values more fully? So often we complain about our inability to make change on big civic issues like homelessness or gun policy or climate change. When we look at the systems that are holding us back from change, we nearly always find that money is a big factor: lobbying organizations and big money donors flood the system with cash to keep the status quo.

It frustrates me that our response to this is often to reaffirm “money is evil” instead of thinking, if the system run on money, then let’s get the money and then change the system. There is absolutely no reason that money needs to be a corrupting influence. Who would you help if you had more money? What injustices would you rectify? How could money bring your life more into alignment with your values, not less?

Why it matters that we’re honest about money and happiness

When we blithely insist that money can’t buy happiness, we create false expectations that disproportionately affect young people, marginalized people, and people living in poverty.

Young people are often counseled to “follow their passion” and ignore the financial ramifications of their career choices because money shouldn’t matter. While this may be the right choice for some, others end up feeling burdened and stuck, and disconnected from their passion once they experience the true difficulties of life weighed down by financial insecurity and debt.

Worse, the myth that money can’t buy happiness implies that people in poverty should be able to be happy with their circumstances, and absolves society of the responsibility to provide a basic safety net for everyone. In a world where money doesn’t buy happiness, stark wealth inequality seems less ethically problematic than it actually is.

The belief that money doesn’t bring happiness also perpetuates the idea that it’s more virtuous to be without money, because then you’re free from its negative influences. This belief is often weaponized as a double standard against women and marginalized groups. If a man buys a fancy car, he earned it and deserves to enjoy it. If a woman tries to earn more money and spend it on, say, a handbag, it’s a frivolous purchase and her values are out of whack. People living in poverty are shamed for wanting more (since money doesn’t buy happiness, they should have everything they already need to be happy), while billionaires are hailed as smart for using tax loopholes to grow their wealth even further.

Let’s be real about the fact that while money can’t buy love or inspiration or community, it nevertheless plays a big role in our happiness and well-being.

What if Money Helped You Live More Authentically?

What if money was neither good nor bad, but simply a vehicle for you to live your most authentic life? What would you do to earn it? How would you spend it? What kind of life would you live? What kind of world would you create?

These questions, to me, are far more interesting and creative than the reflexive assumption that money is irrelevant to happiness. Does knowing that money actually does influence happiness change your relationship to it? I’d love to know your thoughts on this complex topic in the comments.

November 3rd, 2023


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    Discussion (17 Comments)

  1. Maya Murphy on November 3, 2023

    This is a great article! It’s researched, well-thought out, and provocative. What’s difficult about these mixed messages about money is that they lead us to guilt and self-sabotage instead of earning more money by providing more value to the world. That’s why I’m grateful that you brought this truth to light. Money is not bad, and I agree that it makes us able to be more of who we are: more generous, more able to serve, more able to use our time for it’s highest and best use…

    1. Ingrid Fetell Lee on November 4, 2023

      The self-sabotage is such an important point! Thanks for bringing that up. If I believe money is bad and I shouldn’t need it to be happy, what’s going to happen when I have money? A whole lot of self-sabotage to resolve that inner conflict!

  2. Zerka on November 4, 2023

    A very thoughtfully written article. I agree with nearly everything you have said.

    1. Ingrid Fetell Lee on November 4, 2023

      Thanks for sharing your thoughts!

  3. Sandra on November 4, 2023

    Really great article, debunking  old shibboleths about the nature, impact and actual value of money. Mere “things” won’t bring durable happiness, but money  used judiciously can increase options, freedom, security which may lead to greater wellbeing.

    1. Ingrid Fetell Lee on November 4, 2023

      Yes! I often felt so constrained in times when I’ve had less money, and then beaten myself up for it. Then when I’ve gained more and felt freer, it became clear that it wasn’t my mindset. It was the money.

  4. Adeline on November 4, 2023

    Very interesting and very true… I’m so lucky to live in France where health and education are far (far, far) less expensive than in the US. That being said I was unemployed for many months and now my income as an employee isn’t very high. Gas, reparing your car, trying to save up some money in case of emergency, etc. is a daily stress and often bad choices are made as options available are not that great. And you can’t think ahead that much.
    But what I observed is that every clothes, furniture, etc. I bought still give me the same pleasure than the first day. Sure I have less items that I want to but every one of them were passionately desired. And I’m lucky enough to be able to see beauty in small details which is free for the most part.
    I hope it’s not giving the impression of a sob story because I’m not one of the poorest and as I said very important things are less expensive here !
    It’s always such a pleasure to read your Newsletter ! Thanks you infinitely.
    Greetings from France (Brittany) 😉

    1. Ingrid Fetell Lee on November 4, 2023

      I’m sorry for your difficulty. Your story is an interesting illustration of this. Your point about not being able to think ahead as much is very true and supported by research. Studies of people living in poverty show they often make poor long-term choices because their cognitive capacity is overtaxed by the burdens of surviving daily life. I love that you’re finding joy in the things that you have and truly love. And beauty in the small things.

  5. Dianne Whitehead on November 4, 2023

    I can personally attest to the truths contained in this article. My husband and I were in an uncomfortable situation with money, and then we received a windfall that comes every month. What a wonderful difference this made in our lives! The security we now have that we can afford medical care is great. We can afford to travel (as I’ve always wanted to), we can afford luxuries, we don’t worry about the high price of food and gasoline: we know we’ll be OK.

    1. Ingrid Fetell Lee on November 4, 2023

      What a wonderful illustration of the power of this principle. Congratulations on your windfall, and happy travels!

  6. Shauna on November 4, 2023

    Maybe the goal is to learn to treat money more like a tool instead of a reward that leads to using it consistently towards meaningful benefits (physical/mental healthcare, education, experiences, comforts). Benefits that DO lend toward a lasting happiness and feeling of life satisfaction. As a tool, maybe we’d be more willing share it, to help others live well too. Then maybe the world would be a better place. Tra La La. 

    1. Ingrid Fetell Lee on November 4, 2023

      This is such a great reframe! Love the idea of money as a tool. Thanks for sharing, Shauna!

  7. Ruby on November 4, 2023

    In Australia we have a cost of living increase and affordable housing crisis that has been creating financial stress for large numbers of the population who were previously managing to feel relatively safe and comfortable. Rent and mortgage interest rates have blown budgets and staple food items have doubled in price. Medical care is a mixed system where public health has long waiting times and gap fees can mean the care is not accessible at all. Fuel prices have also increased. Homelessness and poverty is a real threat even if you have a job. This struggle makes life overwhelming and exhausting. Without a fortuitous windfall, how does a person who has unwell family members to care for, manage to rise out of poverty and give my happiness spark a little bit of room to grow?

  8. Priya on November 5, 2023

    The last para summarises it beautifully. I am also amazed by how to the point you have distinguished how we judge choices based on gender and class. I am happier now as a self – employed even when I make less money because I have more time, access and choice. But the decision was possible only due to the fact we had our finances sorted and its indeed a privilege.

  9. Ari on November 5, 2023

    The other day, I picked up a prescription for a grand total of $0.28, which I paid with my literal pocket change. The same day, I looked through an explanation of benefits from a recent medical visit, where a $648 visit cost me $0.00. What was my feeling? Immense joy and gratitude.

    Different times of our lives, either my husband or I was unemployed, and we had to live on one salary. When I was unemployed, or underemployed, it was almost always due to lack of childcare. We are excellent at budgeting, and while we were able to live on one salary, we couldn’t afford healthcare (insurance). The crappy insurances that we could buy out of pocket offered only 3 doctor visits a year. One time we avoided seeking medical care for my husband when he was very sick because of a lack of insurance.
    I really think joy comes back to appreciating the little things, as you often write. One of my little things: preparing meals for my family every single day, which I wouldn’t be able to do if I worked two jobs. Secondly, hugely, the joy and peace of mind that comes when I can walk up to the pharmacy or doctor and see the care we need, with a tiny price tag.

  10. Shawn on November 9, 2023

    Good article. Money is so multifaceted that in some ways it can buy happiness but in others it can relieve a lot of stress. But it is loaded with emotion. It is often a secret (salary information is rarely shared) and is rife with relative deprivation. I come from a line of Olympic level budgeting women, and while I am grateful for the knowledge the behavior usually accompanied an underground lake of anxiety and a longing for comfort (to not live with the anxiety) and for experiences outside the relatively small sphere that budget allowed (travel, education, entertainment). In reducing anxiety and opening up the world to greater experience, money definitely contributes to happiness and stability.

  11. pou on November 17, 2023

    so true


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