When and How Money Buys Happiness

Does money buy happiness? It depends. If you are poor and unable to afford basic necessities (e.g., food, shelter, clothes), then yes. But if you already have millions of dollars in the bank, whether more money will make you happier depends on how the additional money is spent.

For instance, materialists often end up spending money in ways that do not increase their happiness. Materialism refers to a value or belief system that gives greater importance to worldly ambitions and owning possessions. Using money to acquire material possessions for their own sake, however, is less likely to increase happiness than spending money to satisfy psychological needs—increasing one’s autonomy, building strong social bonds, learning new things, using one’s skills, etc.


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