Does Money Make You Happy?

One of my favorite frugal blogs is Common Sense With Money. The writer– a certified public accountant turned mom– is incredible with numbers, organization, and knowledge. I don’t understand half of what she says, lol, but I am learning!

She has a very interesting post up today, looking at a new study that says that more money seems to lead to more happiness.

More than 34 years ago a economic study published argued that making more money didn’t lead to more happiness but instead led to upgraded wants. In other words, if when you made $45K a year you yearned for a Toyota, now that you make $75K that Toyota is not enough for you and instead now you want a Lexus. Earning more money only reset the bar on the things you wanted.

That was 34 years ago. A new study has been published and the writers are basically saying that indeed more money seems to lead to more happiness. People around the world have been polled and it seems that people who live in wealthier countries are more likely to say that they are satisfied with life. The study particularly finds that in the United States, households that earned more than 250K a year are more likely to say that are “very happy” (90% likelier).

I’ve always been doubtful of “studies” proving anything, so I don’t give them much of a glance when I read them. The post went on to say that money- and lack thereof- is usually tied to a complicated mix of other components wherein we calculate “happiness.” For example, in a war zone, constant societal upheaval, famine, diseases, and other such things can make you unhappy, no matter how much money you have. Money is merely a perception, I think. The power of money is what you make it. You can make bananas to be the new measure of riches. If you have tons of bananas, you’d be rich. And supposedly, happy.

I don’t think it’s money that makes you happy. I did a post about the Amish people recently. They have their problems, but they are, pound for pound, happier than the average American with five televisions and three SUVs.

I think what makes a person “happy” in Western countries, and particularly in America, is opportunity. Money is a result of our abounding opportunities in this country. I’ve heard about the “American Dream” for decades now. It has morphed over the years. Today, the “American Dream” is owning a house, having a job, sending your kids to college, having enough money, etc. It was not interpreted in such a way in the past. In the past, the “American Dream” meant the world was open to you– opportunity! No longer were you locked into serfdom or a caste or inherent poverty. You could be a “self-made” man, from rags to riches. That used to be called the “American Dream.” Like so many things today, the definition of the “American Dream” is now determined by how much stuff you have or can get. Our culture is viciously materialistic. A materialistic  lifestyle does not make you happy.