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When I was a young boy (about 500 years ago), I would often fantasize about living in a mansion and driving an exotic sports car. At the expense of dating myself, the Lamborghini Countach was the hot ride in my day, and I would imagine myself cruising around town in one attracting the attention of all of the beautiful ladies.
If only I had money to buy one, I thought, it would make me happy.
But I didn’t have any.
It took me a few years to discover that money can’t buy happiness, but as a young man, I thought it was the key to living a good life.
With age comes wisdom, and I now know that once you have the things you need in life (housing, shelter, clothing, food, insurance, etc.), having a lot of extra disposable income doesn’t necessarily make a person any happier.
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Money Can Buy Happiness (Sometimes)
This isn’t a contradiction.
There is a time when money can buy some degree of happiness. That time is when you don’t have enough money to meet the basic necessities of life – like when you don’t have enough money for food or clothing.
I grew up in a small coal mining community in the Appalachian Mountains, and I’ve seen the pain that poverty can cause. Having enough money to pay your bills and buy the things you need can make a big difference for many.
But there’s a distinct difference between those who need money to buy the necessities of life and those who just want more money for the sake of being rich.
How Much Money Do You Need?
When have you earned enough money?
The Greek philosopher Epictetus once wrote, “wealth consists not in having great possessions, but in having few wants.”
This is one of my favorite money quotes, and it perfectly illustrates the attitude about money that we should all strive for.
According to a Princeton University study, money does buy happiness up to $75,000 a year. Additional money earned over that amount produces very little extra happiness.
A more recent study, however, conducted by researcher Matthew A. Killingsworth of the University of Pennsylvania found something different. His study concluded that happiness does continue to increase past $75,000.
Regardless of the university studies, there are some things that money can never buy. Because of this, it is my belief that accumulating money and buying more things does not lead to true happiness.
Why Money Can’t Buy Happiness
Many seem to have a hard time understanding why money can’t buy happiness. It seems logical, after all, that having enough to pay off your mortgage and buy a bunch of fun stuff would make you feel better.
But that’s not the way it works.
There are some very good reasons why having a higher income doesn’t necessarily make a person any happier. It can actually have the opposite effect. Many wealthy people, for example, are actually very miserable.
Let’s take a look at a few reasons why money can’t buy happiness…
1. More Stuff = More Work
One thing that many don’t think about is the more stuff you own, the more work it takes to take care of it.
Think about the home you live in. In 1960, the average home size was 1,000 square feet. Today, home sizes have exploded. While living in a bigger home may sound great, it does have its negatives to consider.
It takes more time and effort to clean a larger home. I don’t know about you, but I hate house cleaning. Yes, I do it (I’m not a slob), but I honestly don’t like anything about it. I put it in the same category as having dental work done.
2. More Stuff = Less Free Time
The more stuff you own, the less free time you will have to enjoy life because you’ll be spending time maintaining and cleaning the things you bought.
One of the most valuable assets we have is our time. Sadly, when many aren’t working at their jobs, they come home to take care of chores around the house and miss out on much-needed rest.
The larger the home you have, for example, the more of your free time you will have to spend cleaning it or taking care of DIY projects. The same thing goes for your vehicles. If you buy a fancy car to drive on the weekends, for example, it may get dirty (gasp!), causing you to spend much of your free time washing it, waxing it, and cleaning the interior.
3. More Stuff = More Expenses
The more things you own, the more money you will have to spend to maintain those things.
Bigger houses, for example, need more repairs than smaller ones. There’s more that can go wrong or break. Unfortunately, repairs are a necessary part of home ownership. But repairs can be expensive. And if you try to do them yourself, there goes your free time again.
Bigger houses also cost more to live in. The more square footage you have, the more money it costs to cool and heat your home. There’s also the issue of property taxes. Bigger houses are usually worth more, and that means you have to pay more in property taxes each year.
Don’t let your stuff own you. The more stuff you own, the more work and money it takes to maintain it. Sometimes less is more. Owning less stuff can free up some of your time to do things you enjoy.
4. Buying Things Only Provides Temporary Satisfaction
Money can buy short-term happiness or satisfaction. Nearly everyone has experienced a high when they’ve bought something they’ve been desiring. But those feelings of satisfaction are usually temporary. They may last a few weeks before they fade away and that new thing is no longer interesting or exciting.
Science has confirmed that we derive more satisfaction from our experiences than from buying things. Experiences can be more meaningful, and they don’t have to cost a lot, either.
Getting together with a few friends you haven’t seen in awhile, for example, may give you far more satisfaction than buying that big-ticket item you’ve been eyeballing. An evening with your friends could create a great memory that could last a lifetime. The big-ticket item you buy will eventually wear out and need to be replaced.
Where’s the fun in that?
5. Keeping up with the Joneses Isn’t Fun
One reason why so many think that money can buy happiness is because they see their neighbors and others around them living in large mansions, driving fancy cars, and pursuing expensive hobbies, and it really looks like they are enjoying life – they genuinely look happy. And they desire the same lifestyle for themselves.
The problem with trying to keep up with the Joneses is that there’s always going to be someone new who comes along who has more stuff than you. The continual desire for more stuff forces people to work more or harder to buy the things they think they can’t live without.
The root of the problem with keeping up with the Joneses is envy. It’s about continually desiring what other people have and never being satisfied with what you already have.
Envy will eat you alive. It will rob you of your happiness and keep you from experiencing true happiness in life.
6. It Will Never Be Enough
If you ask most people how much money they need to be happy, the amount they give you will almost always be more than they currently have. It’s always more.
The problem with this is that when many do earn a raise at work, they often buy more stuff with it. Instead of being happy with the economy car they currently drive, some will use a raise as an excuse to go out and buy a fancier car.
One of the keys to happiness in life is learning to be content with what you have. There are many benefits to living below your means. In addition to the obvious financial benefits, you’ll also have much less stress in your life.
Another important key to happiness in life is to not compare yourself to others. So your neighbor just bought a fancy new car. So what? Let your neighbor enjoy his new ride while you take comfort in the fact that you didn’t go deep in debt to buy something that you didn’t need.
Staying on the hamster wheel of envy is a recipe for unhappiness.
7. Money Can’t Give You Peace of Mind
True happiness has nothing to do with the size of your bank account. It’s a state of mind. People can be happy whether they are poor or rich. It’s a choice.
Many people, for instance, grow up in poverty and don’t even realize it until they are older. It wasn’t their material possessions that made them happy. It was often their close family ties and friendships.
Peace of mind can often be achieved by keeping things in perspective. So what if you don’t live in the best house or drive the nicest car? At least you have a home and a vehicle. Many in the world have to walk everywhere they go. And others don’t even have shoes. It’s a matter of how you view your situation.
8. Money Can Become Your Master
Why do you go to work? Is it to earn enough money to buy the things in life you need, or is it to continually earn more and more money so you can keep up with the Joneses?
If your goal in life is to become rich so you can buy a lot of stuff you don’t need, you may become a slave to your work and to earning the money you desire. In other words, instead of being in control of your life, you live for money. Money is your master.
Money is something you use to buy the things you need. It’s nothing more than a tool. It isn’t good if money has such a grip on you that it becomes your master – a master that dictates how you spend the majority of your time (working to earn more).
If you desire to be truly free, it might be worth considering establishing a new relationship with money. If you find yourself desiring a new car, boat, motorcycle, or something else, for example, ask yourself why you want it. Do you really need it? Or is it something else that will take up more of your time and resources?
9. Money Can’t Buy Friends and Family
When people are on their death beds, they typically don’t ask to see the things they own one last time. When they know their time is short, the stuff they’ve accumulated over the years no longer matters. Their achievements are no longer important, either. No one ever asks to look at their college diploma one last time.
When people know they are dying and they only have a little time left, they want to be around those they love – their friends and family. It’s people that really matter – not stuff. And friends and family can’t be bought.
Instead of focusing on accumulating more money and stuff, true happiness comes from nurturing relationships and making new friends. Someone who truly loves you won’t care about your net worth. That person will value you for who you are.
10. Money Can’t Buy Love
Have you ever noticed that so many wealthy celebrities go through multiple marriages? As wealthy as they are, they never seem to find true happiness in their relationships.
That’s because money can’t buy love.
True love doesn’t care whether someone is rich or poor. But when your focus in life is on money, power, and fame, and not on your significant other, your relationship will suffer.
People’s relationships with their spouses affect their happiness far more than how much money they have. And most could get a much greater ROI from investing in their relationships than earning more money and buying more stuff.
Money Doesn’t Buy Happiness
True happiness doesn’t come from having more money or from buying more stuff. Rather, it’s learning to be content, nurturing relationships, and other intangible things that have nothing to do with the size of your bank account. The things that really matter in life can’t be bought.
Money is just a tool that we use to buy the things in life that we need, and having more of it doesn’t necessarily make us happier. It’s like having a socket set to repair something when it breaks. Having two socket sets doesn’t make the repair job easier or faster.
When money isn’t our primary focus in life, it frees us to enjoy the things that really matter – friends, family, and our free time. Changing the way we view money then is the first step in achieving true happiness, the kind of happiness that comes from being content with what you have.