Coronavirus and Your Money: Special Coverage
By Tim Lemke / Wise Bread
December 22, 2015
Eugenio Marongiu—Getty Images

Whenever someone tells me that money can’t buy happiness, I am often tempted to insist they give me all of their money as a way to test this theory.

Research abounds on the “Can money buy happiness?” question, and there is evidence on both sides. It seems that true happiness can come from deep personal connections and life experiences rather than material goods. But there’s also information showing that people on the lowest end of the income scale are vulnerable to depression and other mental health problems.

Here’s a look at some of the research indicating that money does indeed play a role in making people happier.

1. You’re Less Likely to Suffer From Depression

A 2012 report from Gallup revealed that people in poverty are more likely to suffer from health problems, with depression being the most common. About 30.9% of poor people said they have been diagnosed with depression at some point, compared to about 15.8% (half as many!) for those not in poverty.

2. Your Kids Brains Will Develop Better

PBS reported in June on the growing body of evidence supporting the idea that growing up in poverty can have a long-term impact on children’s cognitive development. In the most extreme cases, children endure “toxic stress” that is shown to actually chemically alter their brains.

More From Wise Bread: 6 Ways Money Really Can Buy Happiness

3. You Can Afford an Education

A 2012 study by Pew and the University of Virginia found a connection between happiness and obtaining a college degree. A broad education, researchers concluded, can lead to a richer and more fulfilling life, as well as greater earning opportunities.

4. You’ll Avoid Student Loans

There’s been a lot written about the impact of student loans on young people, and there’s evidence that the crushing debt can actually be detrimental to happiness. An article published in the journal Social Science and Medicine concluded that student loan debt was related to “poorer psychological functioning” among young adults.

More From Wise Bread: Can you talk to your friends about debt?

5. You Can Mentally Savor Life

When you have money, you don’t need to focus as much attention on acquiring it in order to meet your basic needs. This frees up your mind to actually savor the experiences of life, according to a 2010 article in Scientific American. The article concluded that “…a person’s ability to savor experiences predicts their degree of happiness.”

6. You’re “Buffered” From Sadness

A recent paper in the journal Social Psychological and Personality Science concluded that there may not be a direct connection between money and happiness, per se. But, the authors said there was strong evidence that money prevented sadness. The study concluded that people with money can more easily “buffer” themselves against stressful events.

7. You’ll Be Free to Spend Money on Others

When you barely have enough to support yourself, you’re likely not thinking about giving back to others. But being generous with your money is a path to happiness, according to a Harvard study titled “Using Money to Benefit Others Pays Off.” In the study, researchers gave money to students to spend on either themselves or others by the end of the day. “People who had been assigned to spend the money on someone else reported feeling [a] happier mood over the course of the day than those assigned to spend the money on themselves,” the authors wrote.

More From Wise Bread: The things that money just can’t buy

8. You Can Spend Money on Experiences

There’s considerable evidence that buying “stuff” doesn’t make anyone any happier. But paying for experiences offers a good bang for your buck when it comes to happiness, according to the book Stumbling on Happiness. Whether it’s swimming with sharks off the coast of South Africa or hang gliding over a volcano in Hawaii, experiences do cost money.

9. You’re Less Likely to Be Lonely

A 2011 study in the Journal of Consumer Psychology concluded that people with meaningful social connections are generally happiest. And there is other evidence showing that people with less money are more likely to be lonely. The Guardian reported in 2014 that “Poor social networks should be included as a contributor to and signal of poverty.”

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