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Can Money Really Buy Happiness?


Can Money Really Buy Happiness?

February 21, 2022

It turns out that whoever said money can’t buy you happiness was wrong.

Money can buy you happiness, as long as you give some of the money away, or use it for an experience rather than buying a product.

Dunn and colleagues (2008) conducted three studies that examined the relationship between Americans’ spending habits and their self-reported happiness. The first study was a national survey conducted on 632 Americans that asked respondents to detail their income and spending habits. The participants were also asked to rate their general happiness level.

The researchers found that two things were significantly correlated with greater general happiness levels — higher income and spending on gifts for other people or money given to charity. Although past research has been inconsistent in its finding that people who are rich generally are happier than people who are less well off, more recent research finds that the wealthy are indeed considerably happier than those with average or poor incomes (Lucas & Schimmack, 2009).

One could argue, “Well, hey, of course having more income can make you happy…” But maybe it’s related to either the dollar amount given. Or the fact that people who are more likely to give money to others or to charity are just inherently happier people by character. So the researchers set out to examine those hypotheses in two separate follow-up experiments.

In a small, second study, 16 employees were asked about their general happiness levels before and after receiving their annual bonus. No matter what the size of the actual bonus, employees who spent more of their bonus money on others or charity reported greater general happiness levels than those who spent more of it on themselves.

Finally, in a third study of 46 people, researchers discovered that participants who were directed to spend a small amount of money on others (either $5 or $20) reported greater feelings of happiness than those who were directed to spend the same amounts on themselves. Again, the dollar amount didn’t matter.

The third study suggests that even when the choice isn’t ours, we still feel the happiness effects of giving away money to others — even when the actual value is small.

Other recent research sheds more light on the relationship between happiness and money, too. For instance, Nicolao et al. (2009) found evidence that confirmed previous research that we are also generally happier when we spend money on experiences — like a vacation — rather than material things. But here’s the catch — we’re happier only when those experiences are positive (not so much when they are negative).

So indeed, money can buy you happiness — as long as you give some of it away. A good thing to keep in mind this holiday season.


Dunn, EW, et al. (2008). Spending money on others promotes happiness. Science, 319(5870) 1687-1688.

Lucas, R.E. & Schimmack, U. (2009). Income and well-being: How big is the gap between the rich and the poor? Journal of Research in Personality, 43(1), 75-78.

Nicolao, L. Irwin, J.R., & Goodman, J.K. (2009). Happiness for sale: Do experiential purchases make consumers happier than material purchases?  Journal of Consumer Research, 36(2), 188-198.

John Grohol Psy.D. Bio

Dr. Grohol researches and writes about mental health, psychology and technology issues.

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