It’s an age-old question with which many — including philosophers, economists and psychologists — have wrestled.
Even rappers have gotten in on the act.
“Mo Money Mo Problems,” a 1997 song by the Notorious B.I.G., contains the chorus “It’s like the more money we come across/ The more problems we see.”
Ten years later, the artist formerly known as Kanye West rapped the line “Having money’s not everything/ Not having it is” in his hit “Good Life.”
As the lyrics from the two songs indicate, having a lot of money and not having enough can both lead to unhappiness. But few would argue that having some discretionary income doesn’t facilitate happiness to a certain degree.
“This notion that money cannot buy happiness is just, like, patently false,” social psychologist Elizabeth Dunn recently told CNN Chief Medical Correspondent Dr. Sanjay Gupta on his podcast Chasing Life. Dunn, a professor in the department of psychology at the University of British Columbia in Canada, conducts research that focuses, in part, on getting the most enjoyment out of money.
“Money can absolutely buy happiness,” said Dunn, the coauthor of “Happy Money: The Science of Happier Spending.” “And if you hear anyone say money can’t buy happiness, I would say, tell them to try giving some of it away.”
You can listen to the full episode here.
One well-known study from September 2010 posited that happiness rises with income until income hits a certain threshold (around $75,000), after which happiness flattens out. But a 2023 reanalysis of that research along with a second study published in January 2021 found that the tapering off of happiness mostly happens in the least happy people, no matter their income.
Regardless of how happy you are and how much money you have, you go back to your baseline of happiness after a positive or negative experience, researchers found. It’s a concept known as hedonic adaptation. “We adapt to lots of things, right?” Dunn said. “But hedonic adaptation is about (adapting to) happiness, that feeling of pleasure.”
For example, the joy from buying a new car or getting a raise wears off after a while; they just become the normal state of affairs.
“When people get an increase in income or say a big windfall, they definitely get happier,” she said. “For a period of time, right? There’s certainly some truth that we are almost on a kind of permanent downward slide back to our baseline level of happiness when something good happens.”
Dunn said the question is whether the return to your baseline is complete or whether your level of happiness has been elevated somewhat.
“There’s a famous study suggesting that, oh, winning the lottery doesn’t make you (happier). It turns out that that study wasn’t very well done,” she said. “And when you look at better, bigger, newer studies, it’s like, no — winning the lottery probably does make you happier. And those benefits don’t seem to completely disappear even after a couple (of) decades.”
If you do get that kind of money — be it from a raise, an inheritance or some other kind of windfall — you should think carefully about how to spend it, Dunn said. “Because money isn’t just something that automatically rains down on us in the form of drops of happiness,” she said. “We have to find ways to turn it into happiness.”
Here are Dunn’s five tips to maximize your enjoyment from money.
Buy experiences, not goods
For the most part, the joy from buying new things burns off pretty quickly, but experiences, which are transitory by nature, paradoxically provide a lasting degree of joy, Dunn said.
“So the idea here is that by buying things like trips and special meals,” she said, “we can actually get more happiness than from buying material things, from couches all the way to houses.”
With that in mind, walk away from your 12th pair of trendy sneakers and book that dinner at a special restaurant instead.
Make it a treat
One way to combat hedonic adaptation is to make what you buy special.
“Don’t just buy things you like all the time without even thinking about it,” Dunn said. “Instead, even consider taking a break from the things that you enjoy, and this will help you get more happiness out of them.”
Dunn gave a personal example of buying kale smoothies — “the most expensive way you could consume kale.” At first, doing so was a rare treat that brought her joy. But before she knew it, she started buying the smoothies so frequently that she stopped savoring them.
Taking a break from “sucking them down,” Dunn said, renewed her capacity to appreciate these drinks.
Buy time
The concept here is to pay for a service to gift yourself more time, Dunn said.
“I think the sort of easiest way to do this is to consider whether there’s a task that you dread, like something you just hate doing,” she said. “And if so, could you use money to buy your way out of it?”
Dunn said her research showed that buying time is a great and underutilized way to turn money into happiness. So, go ahead and hire someone rather than spend a Saturday afternoon scrubbing the bathroom, mowing the lawn or assembling a shelving unit from Ikea.
Pay now, consume later
Delayed gratification makes you (almost) forget about the cost.
“When we pay up front and actually delay consumption, we can enjoy what we buy as though it were free,” Dunn said.
As an extra bonus, you can get some pleasure from simply anticipating it, she added.
Give to others
Call it spreading the joy around or paying it forward — it’s a theme throughout this season of Chasing Life centered on happiness. You turn the focus away from yourself and toward others.
“Think about using money in ways that can actually benefit other people rather than yourself,” Dunn advised. “So, can you give to charity? Take a friend out for dinner? Help a stranger in some small, unexpected way?”
She said spending money on others can potentially enhance your happiness.
We hope these five tips help you use money in a way to get closer to happiness. Listen to the full episode here. And join us next week on the Chasing Life podcast when we explore what it takes, mentally, to be an Olympic medalist.
