Can you buy happiness with money?

Recently, my colleagues and I had a lunch conversation on his latest discovery of an online store that you can buy practically everything. This conversation experienced a change of topic when someone in our group mentioned “You can’t buy everything as you can’t buy happiness.” The person on the other side, however, think that you can indeed buy happiness in getting things that you truly loves and need.

The idea of happiness  – a matter of spending on basic needs

In my opinion, spending money on basic needs does give you happiness when they are fulfilled. Needs are things like shelter, food, clothes and other daily necessity that you require. Therefore, money does make a difference in the happiness index for poorer countries. No doubt that without food and shelter, most likely discomfort and stress can be felt.  This can be easily explained using Maslow’s hierarchy of needs as shown below:

Maslow's Hierarchy of Needs source: http://commons.wikimedia.org

Maslow’s Hierarchy of Needs source: http://commons.wikimedia.org

As illustrated from the picture above, the bottom two levels require some form of monetary transaction. You need to spend money to buy food and a house to meet your safety and psychological needs. However, as you go up to the higher levels, you will realise that monetary involvement start to decline.

At the highest hierarchy – self-actualisation, is what money can’t buy. You just can’t buy creativity off from the shelves and expect yourself to be creative the very next moment (we are not robots with an upgrading of a chip, we can do wonders).  However, some cheeky readers might argue that with money you can get to sign up for courses that equipped with you with these skills. But do bear in mind that once again it doesn’t happen in an instance. It has to be gained through experience, and most importantly, you must be self-driven to acquire that skill that you have signed up for. If not, the money you spend will just go down to drain, and obviously you won’t be a better person in creativity nor problem solving.

So why are we unhappy even though our basic needs are met?

It is all because of our expectations!

First of all, with our basic needs being met, we tend to focus on the other side, which is the wants. Living in a highly connected world, we get to see how others indulge in luxury through advertisements, TV shows and social media such as Facebook, Twitter and Instagram. We begin to get disillusioned  and created a new category of ‘needs’, which instead it should be more of a want.

For example, with smart phone technology proliferated into our lives, every one will desire to own one smart phone. That’s could be one reason Nokia phones’ popularity declines even though they are really phones of good quality.  If everyone in our social circle has an iPhone, for instance, we will think it is reasonable to expect we can own one too. As you see, our expectation are shaped by what others in social circle do and have.

Secondly, with every pay rise and promotion, we tend to chase over the new things that we can  afford. As a result, there will be an endless amount of things you will like to pursue and, therefore, this make the incremental becomes less significant. Is like running on a consumption treadmill, having the urge to change to the latest smartphone, tablet and computer so as to get the same level of satisfaction.

Lastly, will be a sense of financial insecurity. As we get used to owning good stuff and living in comfort, many of us are afraid that we might lose it all.  Anxiety and fear of what if one day we can’t buy as much as we used to be able to. You can say that we are more adapt to steady rises (for e.g. annual increments) than a sudden fall in income.

When enough is enough

In economics, there is a principle called the law of diminishing returns, which defined as the decrease in the marginal (incremental) output of a production process as the amount of a single factor of production is incrementally increased, while the amounts of all other factors of production stay constant.

Ok, let’s ignore the academia type of explanation and look at a real life example. Imagine you are feeling hungry, eating a hamburger will significantly increase your happiness (utility) for that moment.  However, as you have a bite on the second hamburger, you will not feel as satisfied as having the first burger.  The sense of satisfaction will continue to falter as you continue to have your third and fourth burger till you are so bloated that no longer it gives you any satisfaction (if not pain, for excessive eating).

This law is so applicable to our daily life that it explains why upgrading to bigger homes do not necessary equates to ultimate happiness. You can say that everyone has a threshold to our needs. Beyond the threshold, extra money to our pocket makes very little difference in our level of happiness.

Conclusion

After much being said, the point I am trying to make is simple – Having lots of money doesn’t equate to a person happiness. You cannot just buy happiness simply off shelves.

If there is one way that money can translate to happiness (after your threshold of needs is met), I would suggest that you spend on creating an experience.

– By spending on a holiday trip with your family and friends will certainly bring you happiness. The memories and bond forged, fulfil love & belonging level in the Maslow’s hierarchy pyramid. The value of this experience will not decline but may even grow as you reminiscing about the laughters and joy that you had with your family.

-By signing up for a course to enjoy the process of learning. Stimulating brain with new ideas is always fun. Besides, joining new courses you will also get to network with others with the same interest. From your new friends, you will get to know about their lives (that’s provided they are willingly to share with you), and these ‘lessons’ make you understand about life better.

– Getting a good book and read it. Ask yourself, when is the last time you spend time reading for personal interest? It can be a good novel that touch your heart, a self-improvement book to inspire you, a ‘chicken soup’ series to heal your wound?

After all, money is not something we can bring along with us after death, right?

3 thoughts on “Can you buy happiness with money?

  1. Hi,

    Largely agree with what you have said but here’s a question.

    Since money can in a way buy time (no need to work for a living), are we underestimating the impact of money by saying it can only fulfil basic needs?

    • Hi,

      Thanks for your visit and comment. 🙂

      First of all, I would like to clarify that my message is that one’s happiness cannot be directly derived from a person’s wealth, once he/she got over the threshold of basic needs.

      As for your question on having money can buy time, yes of course we can! Having to attain financial freedom and to escape from the rat race is definitely worth celebrating! However the equation doesn’t stop there. What we really wanted is not time, but what it can empower us to do what we really wanted. We need time to build bonds with friends (social bonding), to be able to involve in self improvement activities (building confidence and esteem).

      But again, this things really can’t just be bought solely with money, it takes effort. I still believe it largely depend on a personal choice, and how would you spend the extra time? There are wealthy people out there ‘work’ even longer hours than any of us. There are also people I know of, who retired from their job, get depressed due to a sudden lost of an identity and social belonging to an organisation.

      I did not belittle the impact of money. In fact, money is crucial in meeting our needs to survive especially living in a city. However beyond meeting needs, money will be just like a tool. Depending on how you use it, and the result of your happiness index will varies based on your choices.

  2. Pingback: What makes you stay in a job? – Choice Theory | Spectra of Life

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