We all have opinions about whether or not money can buy happiness because we see real examples of it all around us. We read about wealthy celebrities who are miserable, yet we know lower income people who seem to be happy. Yet, as the saying goes, "It's better to be miserable with money than miserable without it." Although past research shows that those with more money are usually happier than those struggling to get by, new academic research in the social science field is giving us new twists to the answer. The results from several studies are summarized in an excellent article by Andrew Blackman in the November 10 Wall Street Journal. In summary, here are the findings:
1. Experiences over possessions. Actress Bo Derek once said, “Whoever said that money can’t buy happiness simply didn't know where to go shopping.” The new research indicates that she got it wrong. Although physical possessions may seem to be permanent, memories of happy experiences such as vacations or a nice meal with someone special last longer.
2. Spend it on others. Receiving a gift is nice, but most people derive more satisfaction from giving one or by helping others. At some point, the accumulation of possessions and experiences reach a point of diminishing returns. Making others happy does not.
3. Purchase time. Money spent outsourcing tedious tasks, such as yard work, changing the oil, or house cleaning can free you up to enjoy the simple pleasures of life or to do more of what you enjoy, such as spending times with friends and family.
4. Don’t go into big debt to do the above three, as the cloud of debt over your had can lead to major anxiety and unhappiness.
So yes, money can buy you happiness, especially if you spend it on experiences, on others, and to buy yourself time. Just do it prudently.