Happiness: Can you buy it with money?

Derek Notman |

Money & Happiness

“Money can’t buy you happiness.”  Chances are you have probably said this phrase in conversation, it is for the most part accepted as gospel, isn’t it?  Do you know why you said it?  Have you ever questioned it?  Should it be gospel, or is it possible that this statement has been fundamentally wrong as long as it has been around?

I propose, like others, that Money CAN buy you happiness, but it also can buy you stress.  It just depends on what you are buying with it!

Let’s first briefly chat about what Money is.  Money is a tool.  A tool we can use in exchange for things, services, philanthropy, and experiences.  Unfortunately we are never really taught this.  Most of us grow up seeing money as something to covet, to strive for, and to accumulate so we can then use it to buy things so others know we have money, which gives us the prized status we all think we need.  We think this will make us happy.  But does it?

As a CFP Professional, I have been helping people with their money for over 10 years.  Over the course of 5000+ meetings I have gained some insight on the different relationships people have with their money.  How they view it, what they do with it, and which ones appear to be happier than others.

The book, Happy Money, suggests that money can buy you happiness.  The authors’ theory is if people use money to buy experiences (like traveling, climbing a mountain, and a million others), and to use it for the benefit of others (like buying a stranger a cup of coffee, clothes for those less fortunate, or numerous other charitable activities) that money can indeed “buy” you happiness.  The theory continues to suggest people who buy things (cars, boats, bigger houses, etc.) may benefit from happiness initially, but this happiness is short-lived.  These things, and the debt that accompanies most of them, tend to increase stress, not happiness for people. 

Although most of us will never admit it outwardly, this stress eats us up inside, yet we continue to buy things for show, so we appear to be happy and content.  I believe so much in the authors’ theory that I give the book to all new clients.  It helps educate and put them in a mindset that is conducive to feeling good about yourself, your money, and your financial plan.  This is a great frame of mind to be in when doing your financial planning.

Through all my client meetings I have helped people in financial situations ranging from those with next to nothing to those who have more money than they could ever need or spend.  While taking them through the financial planning process there are 3 habits that I kept seeing in the people who were most happy, they also happened to be in comfortable financial situations.  I suspect this is more than a coincidence. Perhaps, if you embrace the following 3 habits you too can be happier and more financially sound.

3 Habits of Happy People

  1. Focus on experiences

Although things can give us some instant joy and happiness, it is usually only temporary.  After the luster wears off of the new sports car, the big house, or the expensive handbag, people become burdened with these things.  They will never admit it.  Instead they work harder to have more things because it gives them status.  Status makes us happy, right?  It is a vicious cycle that actually buys you stress.  Perhaps it is a self-esteem or ego thing, where we are struggling with an internal dilemma and need to put a Band-Aid on by buying things.

My Happy Clients see things as a burden, not a status symbol.  Instead, they focus on experiences.  In other words, they do things that give them great memories, memories that can bring them happiness over and over for many years every time they think of it.  Here are some of the traits I see in those that look for experiences:

  • They live way below their means. 
  • They save. 
  • They focus on constantly learning & improving
  • They read
  • They travel
  • They keep an open mind
  1. Don’t worry, be happy (but plan)

Most of us worry, about a variety of things, it is only natural.  However, I have noticed that my Happy Clients choose to think about life, and all its twists and turns, with a glass half full attitude, not half empty. 

A strategy that embodies this attitude and continues to work well for my clients, is to plan for the worst and hope for the best.  In my experience in helping clients with their financial planning in this manner, they know that if the worst happens, they will be OK.  Anything better than the worst and they will happy. 

In planning for worst case scenario you are essentially freeing yourself of all the what-ifs.  Combining this freedom with a focus on experiences appears to have a calming effect.

  1. Give

Humans are selfish creatures.  It is how we are wired.  I suppose it goes back to our basic survival instincts.  Yet, people that make a conscious decision to be selfless, as much as we can be, seem happier than those that aren’t.  To give, gives us happiness.

Now, when helping people plan, I always encourage them to be selfish first, then focus on giving to others.  Why?  Here is a simple analogy.  If you have ever been on a plane, chances are you have heard the safety warning about how if the need should arise to use the oxygen masks above, to put yours on first before assisting others.  This makes loads of sense, you can’t be of any help or service to others if you are passed out.

The same holds true for financial planning, and I believe, happiness.  If your financial plan has not taken into account a worst case scenario, and put strategies in place for it, then you are going to be a burden to the ones you love.  The same could be said for happiness.  If you are not happy within, then it is going to be very hard to make others happy.

Once who have taken care of number one (you), then it is so much easier to give to others.  People that have prioritized this have been able to do so much good for others, which in turn increases their happiness.  They enjoy giving money to their children.  They enjoy giving to their church, or a charity, etc.  Point is, they enjoy giving.  They know they are going to be OK, so now they can focus on giving to others to make themselves and others happy.  Everyone wins!


Money is a huge part of our lives.

It is crazy to think that there is no real formal education for it other than watching what others do, and blindly following them.  Money can indeed make us happy, but we need to shift our thinking.  There is more than one way money can truly make you happy. 

So, the next time you are about to say “money can’t buy you happiness”, perhaps you will think twice and consider these 3 habits as a way of making yourself, and others, happier using the tool we call money. 

Thank you for taking the time to read this post, I appreciate it!


Derek Notman

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