Does Wealth Translate to Happiness?

Some say money can’t buy happiness, others say it depends on how you are using your money. Princeton University’s Woodrow Wilson School did a study on how people’s level of income relates to how happy they are.

“The study, by economist Angus Deaton and psychologist Daniel Kahneman, who has won a Nobel Prize for Economics, analyzed the responses of 450,000 Americans polled by Gallup and Healthways in 2008 and 2009. Participants were asked how they had felt the previous day and whether they were living the best possible life for them. They were also asked about their income.”

The study points out that there are actually two types of happiness. There's your changeable, day-to-day mood: whether you're stressed or blue or feeling emotionally sound. Then there's the deeper satisfaction you feel about the way your life is going.

“Authors found that most Americans — 85% — regardless of their annual income, felt happy each day.” More importantly the study confirmed the idea money doesn’t buy happiness. $75,000 a year was the “limit”, after that people were not happier, maybe more satisfied with their position in life compared to neighbors.

Imagine earning less than $20,000, barely being able to provide for yourself and family, and then getting paid $60,000-$70,000. Surely your happiness would increase as you improve your lifestyle, (maybe treat yourself) and eliminate the stress of late bills and living frugally. This is the idea behind earning $75,000 or less, you would be able to pay your bills, save, and hopefully care for yourself and others the way you want to.

Happiness is different for everyone every day, just as we need to spend money on different things every day. Once the needs are met; food, water, shelter, clothing, we can only buy so much without associating happiness with avarice.

I personally believe that as long as I have enough to take care of my basic needs (bills), and can afford to treat myself to a vacation or gift or pet, then all the money I use for those purposes is buying me that happiness. The day to day happiness is always my choice; no matter what my money situation is, because if you are already happy then money simply helps you get things to increase your happiness.

The study at Princeton University’s Woodrow Wilson School continues to be relevant in our society, especially during the holiday season. We give thanks for all we are able to have, and then we give each other gifts. It is a great time to remember wealth translates to happiness when you have enough to share.