Money and Happiness: When More Money May Not Lead to Joy

We’ve all heard the adage that says “money can’t buy happiness.” But for most of us, having a bit of money in our pockets can most undoubtedly bring some degree of comfort and security. So it stands to reason that the more money we have, the more content and fulfilled we might expect to be.

This theory may conceptually seize us; however, there are times when having more money may not offer an increase in happiness. This issue is relevant particularly with regard to increased earnings. Research has found when an individual earns more than $100,000 a year, the sense of joy associated with a pay raise can diminish.

First, let's acknowledge that whether or not we believe that money can buy us happiness, what we buy with our wealth is sure to have an influence. When our income increases over $100,000, the thrill of major purchases (like fancy cars and large bedroom sets) will likely become more mundane. But our spending on leisure activities may also become less stimulating. The idea of seeing the same Broadway show again may no longer spark us in the same way it did when our financial means seemed novel.

But there is more to dig into when slicing through the fat of money and emotions. An earlier landmark study done by criminologist and PhD candidate, Rafael Luttges, uncovered another hidden factor when it comes to money and happiness. His research disclosed that as a person’s salary reaches beyond $100,000 per annum, their sense of well-being begins to level off. In addition, factors such as free time, work satisfaction and life balance shrink in relevance.

Now, why does this happen?

As it turns out, there are several psychological factors at play. When someone earns above the $100K mark, they have tied up so much of their identity in money and wealth, they can come away feeling a lack of purpose. Likewise, if they have difficulty separating status from worth, they may feel as though they are missing something in their lives. This discrepancy can magnify a sense of guilt at not having achieved more, even though their accomplishments are admirable.

But there is hope. It has been proven that this phenomenon can be challenged given the right circumstances. If a person earns a significant sum of money but actively works towards improving their sense of purpose, fulfillment, and wellbeing, they can win back these elusive feelings of joy. This can be accomplished through meaningful volunteer work, engaging in creative projects, fostering relationships with friends and family, utilizing executive coaches, or simply being conscious of how one allocates his or her cash flow.

Money can make a difference in our life and how we feel about it. All the same, having too much money can be trying and cause us to lose sight of what truly matters in life. Bearing this in mind, it would be wise to keep our values and long-term goals firmly in sight, because these objects of true worth will bring us far more contentment and satisfaction that money ever could.