Matthew Vallade: Money Can Buy Happiness If You Know How

Link to Matthew Vallade’s LinkedIn profile

I am pleased to host another student guest post, this time by Matthew Vallade. This is the 27th student guest post this semester. You can see all the student guest posts from my “Monetary and Financial Theory” class at this link.

This is also the latest post in my Happiness Sub-Blog. Click this link to see the rest.

We have all heard over and over again that, “money can’t buy happiness” and the Bible even states that , “the love of money is the root of all evil.”  The idea of pursuing wealth has a negative connotation connected with it, and many believe wealth will not bring joy to ones life. This may be false though. Money can bring a sense of happiness and purpose into ones life if they use their money to buy experiences instead of material items, and if they give a portion of their income away.

Studies show you’ll get more contentment from putting cash toward experiences (like vacations) than material things (like a new TV).  Material items derive their value because they are appreciated by others. For example, shoes are only “cool” if society as a whole agrees that they are “cool”. In order to bring joy to our lives, material goods need the approval of others and the utility it brings may not be as high as as expected. Also, the value of material goods diminishes over time as new products are introduced and as one adjusts to the purchased item. Experiences are much different, they build bonds and relationships that can be extended over long periods of time. They create memories that do not diminish as time goes on. Experiences create value in our mind that is bigger and better than that of which any object can produce, and thus we should spend our disposable income on these experiences with others, rather than material goods. 

Research has been performed all over the world that shows that those who spent money on other people were happier than those who treated themselves.  This increase in happiness can be seen from those who have lots and from those who have little. Many plan to give when they are rich and have lots to give away, but it is important to give even when one is early on in their career. Giving to others can have a large impact on our happiness and should be taken into consideration during the entirety of our lives.

Money is especially important for those in the lower income bracket. We see that those who struggle to get by with the basic necessities have lower happiness levels, and wealth can help alleviate stress and make ones life more enjoyable. Also,  there is a correlation that people who have large amounts of debt also have an increased amount of stress and a decreases in happiness. Money is necessary for survival in the world that we live and financial stability is crucial in the pursuit of happiness.

The idea that money can’t bring happiness comes from those who are greedy. When money is the sole place where one finds happiness and their only joy is having more than others,  you will find a man who is miserable. The key to using money in an effective manner is to spend it on others and with others. We are creatures who were made to spend life together, and that is how we should spend our money as well.