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Why does money make you happy?

What Dr. Dr. Money says
Beautiful hispanic woman holding bunch of 50 euro banknotes smiling happy pointing with hand and finger to the side
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Money as such does not make you happy. But not having it makes you unhappy. This is something we know from experience, and it also had been confirmed by research studies.
Does money really make you happy?
Everybody knows the feeling: the joy that comes with finally getting a new smartphone. Or buying a pair of trendy trousers. Or going out and having a good time with plenty of spending money in your pocket. Examples such as these could make you think that (spending) money makes you happy. Well, it’s true – sort of. Except for two big BUTs. DenShopping does make you happy. However – and here’s the first BUT – the feeling only lasts for a short time. When you buy a new pair of shoes, you will be pleased. Your brain’s reward system responds immediately to the stimulus by releasing the “happiness hormone” dopamine. Now you feel happy. But alas, this psychological state won’t last for long. Some people enjoy this transient state of happiness so intensely that they develop compulsive disorders around shopping and buying – they become addicted. “Shopaholics” need the regular kicks they get from shopping activities to be able to experience any happiness at all. Richer does mean happier
Nobody’s happy when they have to think twice about every penny they spend. Having more money gives you more opportunities: it can pay for a good education, a trip abroad or repairs you need to have done. Buying clothes is more fun when it’s your taste that decides, not the size of your purse. And it’s nice to eat what you fancy, not just what happens to be going cheap at the supermarket today. However, there is a limit. Above 60,000 euros income per year, more money does not lead to greater emotional well-being. This has been shown by two researchers, Daniel Kahneman und Angus Deaton, in a study on money and happiness.

You first have to earn 60,000 euros a year

Most people do not earn 5,000 euros per month. The average income level in Austria is markedly lower than that. So we can infer that most people will be happier if they get a pay rise.

Links:
· The research study by Nobel laureates Daniel Kahneman, an Israeli-American psychologist and economist, and British-American economist Angus Deaton is available here.
· You can find many articles on happiness on the website of Karlheinz Ruckriegel, a German economist who works in happiness research.
· German brain researcher Gerald Hüther explains in an interview with the business magazine Wirtschaftswoche why we feel better when we buy something.

  • Here you can find the study by happiness researchers Daniel Kahneman, an Israeli-American psychologist and Nobel Prize winner, and Angus Deaton, a British economist.
  • On the website of the German happiness researcher Karlheinz Ruckriegel you will find many articles on the subject of happiness.
  • In an interview with Wirtschaftswoche, German brain researcher Gerald Hüther explains why we feel better when we buy something.
Why does money make you happy?

What Dr. Dr. Money says

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FAQ

Money can make you happy in the short term – for example, when you treat yourself to something you’ve wanted for a long time. This releases the happiness hormone dopamine in the brain. However, this feeling does not usually last long and is not a lasting happiness.
People who constantly have to turn over every penny experience stress and restrictions in everyday life. Money creates opportunities – for education, health, leisure or security, for example. That’s why a certain amount of financial freedom can make life much more pleasant.
Yes, according to studies by Daniel Kahneman and Angus Deaton, emotional well-being increases up to an annual income of around 60,000 euros. Beyond that, more money hardly brings any additional gain in life satisfaction.
When people try to find happiness exclusively through shopping, it can lead to a shopping addiction. The short-term feeling of happiness becomes a habit – and real satisfaction fails to materialize. In the long term, happiness is more likely to come from relationships, meaning and personal development.
Use your money consciously for things that are good for you in the long term – such as education, experiences with others or sensible investments. Think about what is really important to you instead of just giving in to the next spending spree.

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