Wednesday, May 22, 2024

Does money really make you happier?

The world’s first known currency was created in around 600BC, and humans have since been engaged in a relentless pursuit of getting hold of cash. And while there is the cliché saying of “money doesn’t buy you happiness”, it doesn’t stop people from doing everything to get as much of it as possible—whether that’s investing in high-ticket items or entering the lottery every week. Here, we’ll look at whether having a full bank is a necessity or simply just a daydream.

Money can make you happy—to an extent

According to the 2019 World Happiness Report (WHR), the three most important factors for finding happiness are relationships, money, and health. As Dr Michael Mosley explained to the Happiness and Its Causes conference in Sydney, the minimum amount of money needed to make you happy is around £30,000, while the maximum—the point where having any more money won’t make you happier—is roughly £50,000.

This stability means that you’re easily able to afford food, water, warmth, and shelter—which are all the basic needs of Maslow’s Hierarchy of Needs. However, inflation has led to an increased cost of living, which is rising faster for the UK’s poorest families than it is for the richest. This means that the poorer families suffer more, and consequently can’t reach that minimum amount of money required in order to be financially happy.

With statistics like this, it’s no wonder that so many Brits are turning to get-rich-quick schemes, desperately working on increasing their chances of winning big. One example is the multi-level beauty industry. In a scenario similar to the old-fashioned Avon, representatives buy makeup and other beauty products in order to sell on to friends, family, colleagues, neighbours, or whoever will make a purchase. However, representatives are often encouraged to recruit new sellers in order to get a cut of their profits, quickly turning it into a pyramid scheme. These have drastically risen in popularity in the UK, and according to the Direct Selling Association (DSA), there are 400,000 involved in direct selling.

Another example is lottery syndicates which are becoming more common for both online and offline players. However, if you’re planning on joining an online syndicate, we highly recommend checking through reviews to choose a reputable website, or you could risk being caught up in a scam. It’s also worth noting that winning the lottery often gives you more money than you could ever need, and some winners have been struck with what the media call ‘the Lottery curse’. That said, others have used their winnings wisely, investing smartly and donating to friends, charities and hospitals. Generosity has been proven to increase happiness, so it makes sense that sharing a jackpot with loved ones and good causes will result in satisfaction.

Spending money the right way makes you happy

Humans have an innate need to constantly want more. Psychologists call this the “hedonic treadmill” and it explains how people as people get used to their possessions, new things need to be bought to replace the “old things” they already have. The Journal of Consumer Psychology has even previously claimed that “if money doesn’t make you happy, then you simply aren’t spending it right”.

Experts have claimed that in order to feel a sense of happiness from having money, you need to buy the right things. This includes spending money on experiences as opposed to things, helping others instead of yourself, and even buying lots of little things rather than one big thing. This is due to the release of hormones that are released in our brain. Dopamine, for example, is released when we get something we want, while serotonin is released when we feel valued or important, such as when buying gifts for loved ones.

So while we can be happier through having more money, it’s important to note that the correlation between wealth and joy only lasts for a short period of time. Rather, if you were to find yourself sitting on a suddenly large sum of money, you need to focus more on spending it the right way in order to maintain your own sanity and happiness.

Claire James
Claire James
Claire is an accounts manager at Fire Digital UK, an online publishing and content marketing company based in the North West.

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