Can money buy you happiness?

Easy money?

Studies have shown that people who suddenly come into a large amount of money are generally happy for the first year or so, then they return to their “normal” state of mind shortly afterwards. So if you were happy when you came into money, it’s likely you’ll continue to be happy. But if you are prone to depression or feeling down, then despite having money, you won’t be entirely happy underneath.

We’ve all heard stories of people who win large amounts of money through gambling or the lottery and squander it in a few short years. They find themselves almost back to where they started. Unfortunately, they get caught up in the moment and neglect to think about the future; they may also succumb to societal pressures that suggest money and happiness go hand in hand.

Many people underestimate the power of sudden wealth and what it means. It has the potential to destroy relationships and families, and some people feel pressured to share their windfall with family members because they would feel guilty if they didn’t.

A calculated question

If the mere mention of money and happiness in the same sentence makes you cringe, or you believe money is the root of all evil, perhaps your attitude towards making money is stopping you from deserving more money and happiness. That’s not to say you must focus all your energy and time on amassing money and nothing else.

Having a healthy attitude towards money is as important as having a healthy attitude towards your weight, the food you eat, your relationships and so on. According to American evangelist Billy Graham, “If a person gets his attitude toward money straight, it will help straighten out almost every other area in his life.”

So, what do the experts think? Does money buy happiness? I posed this question to psychologist Dr Timothy Sharp, founder of The Happiness Institute in Sydney and author of The Happiness Handbook. “There is no doubt, based on my years of experience and a considerable body of research, that money only buys happiness up to a point. Beyond this point, which is relatively low and requires only that a person is not below the poverty line, increases in wealth or income contribute only minimally to happiness. At the same time, I should note that this does not mean in any way that money is bad or that it leads to unhappiness; only that happiness and money are not highly correlated. The good news is the things that do lead to happiness (such as having a clear sense of purpose, optimistic thinking, good-quality relationships and the ability to live in and enjoy the moment) do not cost anything!” he says.

Retail therapy

If you’re thinking you have nothing to worry about because you’ve never used money for instant gratification, consider this. You’ve had a hard day at the office or a fight with a loved one, so you decide to hit the shops to let off some of your frustration. Perhaps, in some small way, you’ve fallen into the trap of using money for an instant lift. “Retail therapy” really does exist — Australia’s ever-growing credit card debt and consumer spending are certainly testament to this.

Dr Sharp has this to add on the subject: “The problem with satisfaction through retail therapy is that the pleasure or joy one gains from purchasing something new is typically very short lived. Although we frequently feel good after buying something, we also tend to adapt very quickly to the new purchase so that what initially seemed like a fantastic new gadget, car or piece of clothing is now simply the norm. Adaptability or adjustment quickly kills the joy of new purchases, so if you really want lasting and authentic happiness it’s recommended you focus more on other activities such as those I mentioned earlier.”

Childhood inheritance

Have you ever thought about where your attitude towards money and its potential for happiness comes from? Perhaps it was entrenched in your childhood. Rightly or wrongly your parents’ attitude to money would have influenced your beliefs. For example, did you grow up in a household where money was never talked about, or even thought socially unacceptable? Did your parents argue constantly over money, possibly tainting your views about money and happiness?

It doesn’t matter whether you grew up in a household with little money or if you had an abundance of money. People who have lots of money still face financial pressures. In fact, some would argue the more money you have, the more problems you face.

Life and business coach Jackie Nagara, of Self Directions, spends a lot of time with her clients discussing their belief systems around money. She believes our upbringing has an impact on our attitudes to money: “If you grew up in the Depression or through war, or your parents did, then you have a scarcity mentality, always cautious and saving for a rainy day.

“Money really is a source of energy. It’s how we use it that is of the most importance. Some people keep seeking things, hoping to find happiness — a new car, bigger house, better job — and it’s still never enough. They think it will fill a void, but there is still a lot of emptiness.

“The reality is you don’t solve money problems with money; it’s generally something else. If you get in touch with your values, along with a strong sense of self worth, then money starts to flow towards you,” she says.