Money Can Buy Happiness

Money Can Buy Happiness, But Only If You Spend It On These Things

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Studies have shown that after people make $75,000 of annual income, happiness doesn’t increase.  But up to that point, happiness actually does increase with increased income!  What are we to think about this in a society that values materialism so much?  Does that confirm that material things actually do make people happy?  Absolutely not.  While we can probably all agree that a salary of $75,000 would not be considered very wealthy by American standards, it is enough in most areas of the country to support a family with all the necessities of life and even a few luxuries for comfort and convenience.  The studies seem to implicate that beyond that $75,000 dollar threshold, the things we are spending money on are really not contributing to our actual happiness, since we already have those essentials plus extra things to make our lives easier.  While having more money to an extent may increase your happiness, don’t forget that you can be happy at any income level if the things that you value are not things that can be purchased, but things that cannot be bought at any price.

Here is a list of 10 things that you can spend your money on that will contribute to your happiness.


    This one is obvious, everyone needs the basic essentials of shelter, food and clothing.  Note here that we are talking about the need of basic shelter, not necessarily the 2,600+ square foot average home in the U.S.; we are talking about the need of enough food to support daily functions, not steak dinners and lunches out; we are talking about the need for clothing to cover nakedness, not essentially expensive designer decorations.  When you have everything to be comfortable and meet your basic needs, this makes you happy!


    Healthy organic food and gym memberships or exercise equipment all cost money, as does health insurance, medical and dental appointments.  The 2014 Report on the Economic Well-Being of U.S. Households found that 31% of Americans went without some form of medical care in the prior 12 months due to lack of money.  Mental health is just as important as physical health and many people benefit from time spent with therapists or other treatments (all of which cost money!).  Taking care of yourself ultimately saves you lots of money in the long-run, so it’s a great thing to spend your money on!


    Money spent on hobbies that you love, interests that you want to pursue, and things that make you genuinely feel good about yourself are well worth the money spent on them (to a limit!).  If you’re not sure what your interests are, you can explore new hobbies through community education classes or even invest in yourself by taking classes at a nearby community college or university.

  4. TIME

    Time is our most limited resource.  Things that buy you more time, but are also good for you as well can contribute greatly to your happiness by allowing you to focus on things that actually make you happy.  For example, if you hate housekeeping (me, me, me!), hiring and paying someone to clean your home every week or two can increase your happiness doubly – you avoid doing something  you dislike and you have time freed up to do something you enjoy.  Other examples of this include hiring someone to do house repairs, getting a babysitter to be able to spend time with your spouse or friends, hiring someone to help with your blog (haha).


    Debt creates anxiety and stress, which are the enemies of happiness.  If you have significant debt, you know the unhappiness this causes and how it can impact many other areas of your life.  Commit to a plan to decrease and eliminate your debt and you’ll find a contentment that cannot be found in anything that can be purchased on a credit card.  Not owing anything to anyone else=peace of mind.


    Having extra money in the bank creates peace of mind that is irreplaceable with any amount of material goods.  An emergency fund and cash reserve for life’s unexpected trials can make a terrible situation such as a layoff or debilitating illness a little less stressful.  Insurance is there for security as well-health, disability insurance, life insurance (if you have dependents), long-term care insurance, and personal umbrella liability insurance.  For your property, you have peace of mind with auto and homeowner’s insurance policies.


    Studies show that spending money on experiences (trips, tickets to concerts, etc) contributes more to happiness than spending money on tangible goods. This is so interesting to me, because physical goods can last for lifetimes, but experiences are only short-term.  However, when I think about what has made me the most happy in the past it is memories of events, trips and experiences with family and friends.  We spent a lot of money traveling in Asia and don’t regret a single penny of the expense.  However, I could tell you lots of things I’ve wasted money on that I still have in my house, but aren’t creating any happiness for me.


    The numbers of people even in their 40’s and 50’s that have not yet even started saving for retirement are just shocking…and sad.  Social security is lacking these days in security.  Invest in life after your working days so that you can be happy not only now but in retirement and beyond!  Think of the future you want and delay gratification (note I didn’t say happiness-spending money on things you don’t need doesn’t make you happy!) now so that you can be comfortable later as well.


    Think of your favorite outfit or pair of shoes or your favorite meal at your favorite restaurant.  Regardless of the amount you actually spent on these things, they are likely worth a lot more to you than having more quantity of clothes or a larger quantity of food that you don’t just love.  If you focus on spending on only a few things that you actually love (minimalism is in right now-jump on the bandwagon), you will actually save money in the long-run and enjoy the things you have more.


    Learning to give to others whether it be through church tithes and offerings, donations of goods to a local food bank or homeless shelter or any other worthy cause gives you a sense of satisfaction that you’re using your hard-earned dollars in a way that helps the greater good of humanity.  And somehow, giving always seems to mean that you yourself have more.

Happiness is a state of mind.  It is difficult to define what happiness means for one person or another, but the peace of mind that comes through being debt-free, having a nest egg for the future and helping others is universal.

What do you spend your money on that makes you happy?


22 Responses

  1. I’m learning to focus more on spending money on experiences rather than things. It takes a shift in mindset to value experiences. I try to make sure I take pictures so I at least have something to remember my experiences by and something to show for them.

    1. It’s definitely a shift in mindset, because you have to get over thinking first of what other people see about you (keeping up with the Jones’) and instead focus on the experiences that only you can keep. I’m working on creating photo books for each of our travels and it’s just reinforcing the fact for me that experiences are worth more than things!

  2. Great post, debt is my number one happiness killer, but I’m working on it and I do still have a ways to go to hit the 75k mark. I think reaching that number woudl really help because I could then put even more towards my debt to get it paid off sooner.

    1. Good luck with your debt journey and don’t forget to celebrate your progress along the way. I’m working on some debt classes to be posted in a few weeks, including some very helpful spreadsheets to track loan balances and loan payoff progress.

  3. This is so true. I’ve never been one to say that money can’t buy happiness, because it CAN. I believe this. I recently bought two rugs for our new apartment. Yes, it was a splurge. Did we need them? Not really. But I absolutely love them, and the experiences they bring – such as not minding getting on the floor and playing with my dog, or setting up a board game with my husband – are the things that make that little splurge worth it. Every time I step into my home, I love the way I feel, and some of that is because of the rugs.

    I love this post. I get so tired of hearing “money is this, and don’t do that.” It’s refreshing to be reminded that we should step back and enjoy the fruits of our labor, even if we do have debt.

    1. Yes! I love your example about the rugs. I have things like that too-for example, my bedroom furniture that I love. Money is a great tool to make our lives better.

  4. Great list! Money can get overly vilified at times, but it can buy a lot of things that make life easier and happier, just learning how to prioritize what those things are is part of the pf journey.

  5. I think time is an interesting one. While that $75k probably needs to be adjusted for inflation, I always assumed that the implication was that if you earned beyond that, you were probably working too much and losing time in that way. I like your perspective, too! While I haven’t broken down and hired a house keeper, I definitely wouldn’t mind having that luxury in my life!

  6. This is a fantastic article!!! The list is exactly what needs to be focused on in order to be happy. We often stray away from this list and try to buy as much as possible thinking this will make us happy but in reality we feel more depressed with more stuff. I love that you included giving in this list. Thanks for the great article!

    1. Money is such a great tool when used wisely. And doesn’t it seem like the more you give the more you have to give? Thanks for stopping by!

  7. Love the post! And so true. Wish my tech skills were good enough to share this post online haha.

  8. Amazing post! Too often we focus on things we think will make us happy, but they just clutter our homes and waste our money. Investing in your health and in yourself are two really important factors, but all of these are good ways to spend and increase happiness.

  9. Great post, I love when people who make a really good living (I work with a lot of people with doctorates making more that 100k a year) complain about not having money when they have expensive cars, houses, and clothes. None of those things are wrong but the fact that they spend all of there income on them is a little crazy to me.

    Experiences really are the best thing (in my opinion) that you can spend money on. Things sometimes overwhelm you if they are all over your house, they may even add to your stress level. Whereas experiences simply add to your life, give you something to talk about, something you remember, and goals to experience again.

    1. I am currently working on getting rid of extra junk that’s cluttering up my house and life. It takes constant reminding I think. Thanks for stopping by!

  10. No. 3 is an interesting one. When we’re trying to save money, it’s tempting to cut back on everything. But if we can’t do the things we love most because of trying to save, well… life can be pretty miserable!

    1. Saving money and getting out of debt has just as much to do with motivation as it does having the resources. Life’s a balancing act for sure!

  11. Things are so overrated! I agree that experiences contribute to happiness. When I’m facing temptation to spend I always consider whether this purchase is going to contribute to my overall happiness or is it a need that will make me happier.

    1. A big shout out for happiness through experiences! It took me a while to get it, but now it’s much easier to resist the temptation to spend.



I’m Kathryn Hanna-wife, mother of 3 and a Certified Public Accountant. I love to budget (really, I do!) , build spreadsheets and spend money on travel, sewing supplies and good chocolate.


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