The correlation between money and happiness.
By: GaEun, Year 10
The question of whether money can buy happiness has always been an intriguing issue among various people - including philosophers, economists, individuals, etc. While some argue that financial wealth is the key to a fulfilling life, others believe that true happiness lies beyond material possessions. Although the answer to this isn’t clear, we will be discussing the topic, “Can money buy happiness”.
Firstly, what is happiness? Before going into the main topic, it is important to fully understand the term “happiness”. To sum it up, happiness is an emotional state characterized by feelings of joy, satisfaction, contentment, and fulfillment. While this might be attained in several methods, the main focus of happiness is that it is when one’s life feels meaningful and worthy every day, so the question is, can money impact our well-being?
To be straightforward, the answer to that question is ‘yes.’ As money undoubtedly plays a significant role in humanity, having financial security can alleviate stress and provide a sense of stability, which can contribute to our happiness.
Economists Betsey Stevenson and Justin Wolfers of the University of Michigan examined World Bank data from more than 150 countries. And not too surprisingly, they concluded that the more money you have, the happier you tend to be. Nevertheless, through further surveys, it has been disclosed that money can only make us happy to a specific degree. According to 80000hours.org, “each doubling of your income correlated with a life satisfaction 0.5 points higher on a scale of 1 to 10”; in other words, doubling your income may make you only about 5% happier than your previous self.
Another study published in 2010 by Kahneman and Angus Denton from Princeton University noted that in compliance with a survey, day-to-day happiness rose as annual income increased, but above $75,000 it levelled off and happiness plateaued. This reveals that income and happiness do have a positive correlation, but as stated above, it only acts up to a certain level. Once physical needs such as food, shelter, and healthcare are satisfied and a level where you do not need to worry too much about bills, is achieved, money does not significantly make you feel happier.
However, while money can enhance certain aspects of our lives, studies have stated that once the money that we own exceeds a particular degree, additional wealth can diminish happiness and lead to negative emotions. Robert Norlander, an experienced CPA (certified public accountant), podcast host, and author, communicated that "happiness and wealth are mutually exclusive" and that "wealthy people find out soon enough that their happiness is not directly correlated to their wealth" — insinuating that wealth does not suggest happiness.
Though being rich may just seem like a positive thing, the truth is that it has been revealed that many wealthy individuals tend to neglect relationships, health, and personal fulfillment due to the pressure to maintain financial success all the time, leading to severe depression and anxiety. So, here's something else to think about: being generous makes us feel good. From giving directions on the street to helping a friend with their homework to donating money to a worthwhile cause: all of these actions activate the part of the human brain that makes us feel pleasure. Studies show that humans experience a rush of oxytocin when they act in a generous, kind and giving way – which makes us feel happier. So, a solution to wealth woes may be to think about who needs help, and act, in whatever way we can, be it small or large.
Nonetheless, money is important to today’s society and can cause happiness to an extent, factors such as strong relationships, a sense of purpose, personal growth, and experiences tend to have a more significant impact on our overall well-being.
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