"Money can’t buy you happiness" is either a widely accepted insight or a tired cliché. Is it right, though? Scientifically speaking, the answer is… mixed.
A recent study carried out at the University of Bath has once again looked at the relationship between income and happiness.
It seems that, up to a point and within a specific set of circumstances, money can buy happiness. But beyond that, the relationship between money and happiness becomes much looser and uncertain.
What makes us happy?
At the most immediate and fundamental levels, the things that make us happy, or at least the provoke a positive, reward response in our brains, are those that satisfy our basic biological needs. Put simply, we humans, living organisms, need many things to ensure our survival, such as food, water, air, sleep, and security. Our brain recognises these things as being ‘biologically significant’, so if we obtain them, we experience a sense of reward.
Because the human brain can make intuitive and abstract leaps, it can easily recognise that receiving money means we can now more easily obtain food/water/shelter etc. This, as a study carried out by the Wellcome Trust in 2007 found, can be both rewarding and motivational, two things that could fall under the umbrella of happiness.
However, this doesn’t mean ‘more money’ automatically means ‘more happiness’. Money may be recognised by our brains as biologically significant, but there’s an upper limit on how rewarding even biologically significant things can be. For example, eating food can often be pleasurable, but at some point you’ll be sated, after which point eating more causes actual discomfort. Same with drinking. Even things like shelter and security; build too many barriers around yourself and you can feel isolated and oppressed.
There’s also the phenomenon of habituation, where the fundamental parts of our brains learn to not react to things that occur predictably and reliably. As evidenced in a 2011 study carried out by Dr Ruth Krebbs at Ghent University, this is why things that are novel, as in surprising and unexpected, are often more rewarding than familiar things.
In many cases, the same thing happens with money. Receiving your regular pay is reassuring, but receiving unexpected money, even if it’s much less, often makes you much happier.
Also, when we actively and tangibly need it for our survival, obtaining money is very rewarding. But when we go beyond that point, when we’re ‘financially secure’ as they say, money can still be rewarding, but it’s power to make you happy is significantly reduced, a study carried out at San Francisco State University found. More psychological, experience-based stimuli (e.g. travelling, forging new relationships, helping others etc.) have a greater ability to make you happy.
Granted, in the modern world you usually need money to do all those things too, but this ultimately means money’s link to happiness is more indirect, as a means to an end, rather than directly rewarding in its own right.
Is there a threshold amount of money that can make us happy?
That there’s a certain cut-off amount of money where it stops making people has a lot of implications, particularly in the present day. With much talk of wage stagnation, rising prices, and trials of universal basic income becoming increasingly common, the question of how much money people need to be happy is an increasingly salient one.
Unfortunately, there can be no easy answer, at least not one that applies to all people equally, because the factors that determine how much money is ‘enough’ for security and happiness are highly subjective, and vary considerably from person to person.
Some people feel they’d be happy for life with surprisingly modest sums, others don’t think they’d ever feel they had ‘enough’ money. Studies carried out by researchers at the University of Bath have also found that these significant variations are even more apparent when you compare people from different cultures, suggesting the link between money and happiness is at least as much learned as it is ‘innate’.
But even within the same capitalist culture, people’s ideas about financial security can differ drastically, with people who have ample money sometimes being much less happy than those with far less money because they have more worries about.
Can too much money make us unhappy?
This introduces another factor; money can make you unhappy. Or reduce happiness in other ways. Studies have shown that being paid to do something you enjoy can make you less motivated to do it, suggesting it actively reduces potential happiness. This would explain why people are often reluctant to turn a hobby into a job, or actively regret doing so.
Also, in our modern world, money is not static. If we have more money than we strictly need, we don’t hoard a big pile of gold coins in our spare room like modern-day dragons. Money is fluid, often intangible, and typically ends up being tied up with things like investments, stocks, properties, savings accounts, and more.
All these things are subject to the whims of politico-economical factors and more, meaning the person whose money it is has less control over it and less certainty than if they’d gone for the ‘big pile of gold’ option. Loss of control and uncertainty are two reliable sources of stress and unhappiness for the human brain.
Ultimately, rather than “money can’t buy you happiness”, it might be better to say “money can buy you safety and security”, and these things make it easier for us to be happy. But there’s no direct one-to-one relation between money and happiness, and how it affects us ultimately depends on who we are and how we’ve been raised.
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