The Connection Between Spending & Happiness

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  • 0:00 Happiness
  • 0:42 Money's Influence Over…
  • 2:43 How Can This Affect Spending?
  • 3:26 Lesson Summary
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Instructor: Elisha Madison

Elisha is a writer, editor, and aspiring novelist. She has a Master's degree in Ancient Celtic History & Mythology and another Masters in Museum Studies.

Everyone has heard the phrase money can't buy you happiness - but can it? Recent research show that money can 'buy happiness,' as long as it's used to buy the right things.


What makes you happy? Hanging out with friends and family? Traveling around the world? Reading a book? Cooking? Each person's definition of happiness is different, and depends on their values and ambitions. However, there are some commonalities. The first is health, since we all feel happier when we and the people we love are in good health. Another goal that most people have, but which is harder to define, is to live a good life. A good life can mean many things, however, and even people who are struggling or are in a bad situation can find happiness.

So where does money fit in?

Money's Influence over Happiness

Although a person's first response to receiving a large sum of money might be to go out and buy nice things that make our day-to-day lives easier and more pleasant, it's been proven that owning things doesn't make us happy. One reason for this dissatisfaction is that people tend to spend and grow into any additional money they receive.

For example, suppose Sue makes $40,000 a year but is struggling financially. She gets a raise to $60,000 and her troubles temporarily ease up, but then she buys a new car and a new house in a better neighborhood, one that has higher property taxes. She quickly finds that these changes bring about greater expenses and have simply put her into a new category of struggle. More and more possessions can raise your bills and add to the general chaos of life, which isn't bound to make anyone happy. So what does?

Experiences like travel, though fleeting, are proven to make people more happy than possessions. Having adventures creates memories that last longer than any new gizmo money can buy. Using money to travel to new places, go out with friends, or go on a cruise with your spouse are all things that can foster real joy.

Another way money can buy happiness is by giving it away. Yes, you heard that right! The best example is the way people enjoy Christmas as adults. One of the best parts of Christmas is spending time and money choosing the right gifts for our loved ones, then watching them open them up. Spending money on others can actually be more satisfying than buying things for ourselves.

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