Why Money is Necessary for Happiness

Written By Isaac Simpson

We’ve all heard that money doesn’t buy happiness, but the numbers paint a more complex picture.  

Did you know, for example, that people who make their own money are statistically happier than those who inherit?  Or that people who make $75,000 are a lot happier than people who make $25,000 a year, but about the same amount of happy as people who make $150,000 a year?

Strangely, however, multimillionaires (who’s wealth exceeds $8 million) are happier than run of the mill millionaires.

Thus the amount of money you have, while not sufficient for happiness, is often a necessary component of mental wellbeing. Very low income is closely associated with divorce and bad health—reliable causes of unhappiness.

 

The reason for this, as these numbers reflect, is not just so that you can buy cooler cars or bigger houses. If that were the case, those who inherit wealth would be just as happy as those who have made it on their own.

The reason money is important is because it’s needed to feel valued, and to add value to the lives of those around you. And feeling valued is arguably the single most essential element of happiness.

So while giving up your day job to chase your dream of being a great artist might sound appealing, it’s only a good idea if you have some evidence that others will find your art valuable. In other words, money is a great indicator that your trajectory in life is about about more than just you—that you are engaging in something that benefits others enough that they want to pay for it.

Some think that caring about money is selfish, and sometimes that is true. However, it’s not always that simple. To live a happy life, keeping an eye towards your finances will give you a sense of how valued you are by those around you, which is a necessary part of finding fulfilment.