Does Money Equal Happiness?

No. Yes. Well, sort of.

As someone who writes about minimalism and simplicity, I wish I could say that money does NOT at all make us happier. I wish I could say that money is fleeting and unnecessary, and the important things in life aren’t things.

This is partly true. I think many people are far too obsessed with accumulating wealth. We’d do better to simplify our lives and learn to live on less rather than keep chasing after more, more, more.

But on the flip-side, money is necessary in our world. It takes a certain amount of steady income to not be stressed about money! 

Money and happiness are related

Think about it: money fixes a lot of problems. Utilities that keep us warm in the winter, clean running water, car problems, day-to-day logistics. Some money is necessary to buy the basic essentials – food, clothing, housing. More money is necessary for fixing life’s little emergencies that pop up at the least desirable times – car trouble, roof repair, ER visit. And even more money is nice if you’re dreaming about the future and have big aspirations – owning property, starting a business or nonprofit, going back to school.

But after that point – the happiness levels off! A 2010 Princeton study shows us some interesting things about how money does -and doesn’t- make us happier. In the study, there is a gradual incline in happiness and wealth – up to about $75,000 a year. After that, the happiness curve ends. In fact, there are even negative effects of having more money as hedonic adaptation kicks in. Read: the more luxurious your lifestyle, the more you get accustomed to luxury, and lose your ability to enjoy the simple things.


More money does not necessarily buy more happiness, but less money is associated with emotional pain. Perhaps $75,000 is a threshold beyond which further increases in income no longer improve individuals’ ability to do what matters most to their emotional well-being, such as spending time with people they like, avoiding pain and disease, and enjoying leisure….

It also is likely that when income rises beyond this value, the increased ability to purchase positive experiences is balanced, on average, by some negative effects. A recent psychological study using priming methods provided suggestive evidence of a possible association between high income and a reduced ability to savor small pleasures.

-Daniel Kahneman and Angus Deaton
Center for Health and Well-being, Princeton University

In addition, the more you have, the more you have to lose. Your net worth may be good today, but if the market drops then so does your reputation and lifestyle. More wealth may also mean your job is more stressful. The stakes are higher than when you started your career. The stress may keep you up at night or begin to affect your health.

I’m not saying money itself is good or bad. Money is a tool. It is a tool that is notably tied to our mental health.

This is why minimalism is such a big deal

I think people are starting to notice these things on their own. Many of us are run-down and burnt-out, tired of pursuing money. Tired of keeping up with the Jones’. Tired of the daily grind. Tired of maxing out credit cards. Ready for a change of pace.

If happiness truly levels off at a certain benchmark, and if living excessively actually has a negative effect, it makes sense that minimalism is currently exploding in popularity. 

Minimalism isn’t about denying yourself of everything. It is about intentionally seeking that sweet-spot of “enough.” My enough might look different from your enough, but the point is that we’re aware of it. The point is we realize that going beyond enough is extraneous. 

Minimalism reminds us not to inflate our lifestyle when we get a raise, but to consider using our extra to help others. Minimalism reminds us to be grateful and not take more than we need.

For we brought nothing into the world, so we cannot carry anything out of it. But if we have food and clothing, we will be content with these.

1 Timothy 6:7-8

You cannot put a price on your mental wellbeing

All that said, here’s an important thing I’ve been learning about this year: you cannot put a price tag on your mental wellbeing. As much as I love simplicity, sometimes our issues are not simple. Sometimes we need to invest in ourselves – and it isn’t cheap. 

Again, I believe this relates back to the study at the beginning. People who make a little more money might be a little happier because they are able to invest in their mental health. Professional counseling isn’t always covered by insurance. Going to the doctor and talking about depression isn’t easy. Facing your anxiety, your past, your trauma head-on takes courage – and often it takes money too.

If you’re going through a hard time and the main thing keeping you from seeking help is fear of what it will cost, I’d encourage you to take the leap. It made a big difference for me when I sought out counseling last year. If you can afford it, you owe it to yourself. Consider it your most important bill – because out of our mental wellbeing, we live and pour into others.

If you honestly cannot afford it, Google free therapists in your area or call an out-of-pocket place and request an affordable recommendation. It may take some digging, but help is out there for people of all income levels. 30 minutes of research may end up making the biggest difference in your life!

Personally, I struggle with wintertime. The cold and lack of sunlight affects my brain in ways that are hard to describe. So this year I took some small steps – even though they cost a little. I bought some really warm leggings and fuzzy pajamas. I bought some amazing boots – and found them in my size for about half price, which I’m proud of! I’m also running the heat a couple degrees warmer this year, and lighting some candles when I want some ambiance.

These little things aren’t free. These little things cost something. But you know what? So far this winter, these little things have helped a lot. Investing in your mental wellbeing is money well-spent. You don’t have to try to buck it up and tough it out all the time, year after year – like I was trying to do.

Yes, sometimes spending a little money can actually improve your quality of life. Minimalism isn’t about denying yourself. It is about seeking “enough” in your life, and sharing the excess to help others find their “enough.” Sharing the joy will, in turn, make you more joyful.

Thanks for reading! What are some ways that you’ve spent money and it has produced happiness? What are some ways that spending has been flat and joyless? I’d love to hear your stories!


Photography by Sasha Freemind


Add yours →

  1. Great article, Em!

    Winter can be challenging. My mom-in-law has a “happy light” she uses every day and she swears by that thing!
    For me I know my issue is more with the cold, and the fact that the most awful things that happened to us growing up happened in the winter so it just creates a sense of lingering dread. “Name it to tame it”, right?
    Drinking circulation-boosting tea or even just throwing some ginkgo leaves in my tea to keep my toes warm makes a difference, but Halloween and Christmas both have taken on a deeper significance to me as seasonal markers, as one is about this primal hope that you don’t die during the winter and the other marks the return of the light. They remind me to be kind and patient with myself!

    Love you sis! Wish you all the best.

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