There are two factors that impact happiness as it relates to money.

The level of desired money and the relationship to that desired level that has been achieved or is believed achievable.

Someone who does not have high desires can be very happy with a small amount of money. Someone with high desires can be very unhappy even though they have far more than the individual who is happy with just a little bit.

We do a grave disservice to those in 3rd world countries when we try to up their desires without giving them the means to achieve those desires because what we ultimately do in those situations is decrease their happiness which decreases their well-being.

There are many documented studies that reflect clearly that higher happiness equates to better health so by contributing to a lesser state of happiness we are essentially making them less healthy.

It is important to note that having the belief that obtaining the desired amount of money can bring just as much happiness as having the money. It is when we want and do not believe we can achieve that frustration or worse ensues. When you feel certain you can achieve a much desired goal it creates a zest for life that is very desirable.

interesting thoughts!

I believe it’s not possible to make a general statement on whether money makes people more or less happy. Money comes with a whole set of new elements that may have good or bad impact on our happiness, and depending on how susceptible we are to every one of them, the conclusion will go one way or the other.

I recently made an effort to provide a more comprehensive picture of what these ad- and disadvantages are. I invite you to have a look at http://www.spreadinghappiness.org/2009/08/money-how-much-should-we-strive-for-it-to-become-happy/ and tell me what you think!

Thank you,

Nick

I definitely second John’s point that doing kind things for others will make you happy, too!

There are two kinds of misery associated with money
1) the misery of potentially losing what one owns
2) the misery of not having enough money to satisfy one’s wants

This is a good add-on to what a series of studies I wrote about back in September that found similar results. That set of studies found that money can lead to a person feeling greater happiness in their lives, if they gave some of their money away:

http://psychcentral.com/blog/archives/2008/09/05/money-happiness/

And it connects nicely to the research I commented on yesterday that found that experiences stick with us in long-term memory long after purchases do:

http://psychcentral.com/blog/archives/2009/02/14/are-you-better-off-buying-flowers-or-dinner/

… suggesting that altruism and experiences make an important difference in our own sense of “happiness” if we can “spread the wealth around.”