Think Money Can’t Buy Happiness? It Can, Just Not In The Way You Think

I remember growing up in public school, and in my Civics class, we learned what seemed to be a very basic financial construct: Money can’t buy happiness. It was that simple.

We were expected to memorize that phrase. The teacher would start the sentence and expect us to complete it.

“Okay class: Money can’t buy…what?”

“Happiness!” we’d all robotically say like good little soldiers.

And for the longest time, I believed it. Money can’t buy happiness.

But, here’s the thing. The statement is flat wrong.

Money can (and does) buy happiness. It buys it every single day for millions of people around the world. Money is the currency we use to acquire the things we need to feel happy and content.

And, maybe a little extra.

Money absolutely, positively does buy happiness, but not in the way that most people think.

Basic Truths About Money, And What It Can Buy

Let’s begin with the truth about money: Money is a tool.

Like a hammer or a nail gun, it’s a tool that can be used to build virtually anything that we want. The choice is ours.

We could use a high income to build a life full of consumption. We can buy the big house on the hill, or the pricey import luxury car, the expensive suits and nice dresses, dinners at high-priced restaurants, season tickets to sporting events, etc.

Alternatively, we can use that money to support the basic necessities of life and protect our futures, like living in a more reasonable home and driving a normal paid-off car, maintaining a 6-month emergency fund, and investing the rest for our future retirement.

Or, something in-between.

We build lives for ourselves using the money that we earn. The more money we earn, the more buying power that we have, and naturally, we can use this buying power for virtually anything – like nice things, because we supposedly deserve them.

We think those additional things will make us happier. And, this is where many of us fall into the basic money trap.

Basic Money Trap: All The Things We Buy With Money Provide Happiness

Here is where that statement I learned in school is somewhat true.

“Money doesn’t buy happiness”

The trap is simple: We believe that the things we buy provide happiness. And they might, at least for a while.

Case in point: I bought a Corvette the first month after getting my first real job. I plunked down a half year’s salary to buy it, then proceeded to supercharge the car and make it one of the fastest and loudest cars around. And, let’s be honest. It was fun.

I felt good driving that car. It did provide happiness, for a while.

But then, that feeling began to subside.

Things broke on the car. It was always in the shop, and before long, it wasn’t providing the same level of happiness. It turned into a liability, something that I felt obligated to fund, drive and enjoy just because I spent so much money to buy it.

The same thing happened with my big house in the suburbs. And my brand new Cadillac CTS. Going out to eat every day. These things were no longer special. They didn’t make me any happier.

Instead, these were destructive habits I built and, slowly over time, I began to expect them.

Everything I spent money on, I thought, provided some level of happiness. Right after I bought something, I may have been happy.

But, the feeling doesn’t last long.

Happiness is fleeting because we humans are not inherently wired to derive a life of joy based on the things we have.

Life doesn’t work that way.

Money Buys Happiness Not In The Things We Buy But In The Freedom It Provides

Let’s go back to the truth about money that I discussed before. Money is a tool, nothing more and nothing less. As such, we can build whatever the hell we want to build with that tool.

And if you are like most people, you appreciate freedom. Having enough time on your hands to do those things that you enjoy.

Spend time with our family and friends. Use time to make and maintain connections with other people, be the social animals that humans naturally are.

Time, not money, is the ultimate freedom.

And, time is something that we can build more of into our lives with the money that we earn. But like any tool, it is our responsibility to be intentional with the money we earn, and use it to build more than just superficial (and fleeting) happiness.

So, let’s refresh. Money is a tool. It can build anything we want.

And, money can buy things (cars, nice clothes, etc), but things tend to provide us only with temporary happiness.

For most humans, our freedom is most important.

Our freedom to chose how we live our lives. The freedom to quit our jobs whenever we want. To choose where we live.

And, the freedom to control our time. Time with our families and friends. Time doing things that we love and making a positive difference in our community.

And, the time to just be…ourselves.

Ironically, it’s freedom FROM money that provides the most choice in our lives, and very often, the greatest level of happiness.

When we no longer need to think about money, or worry about our next paycheck, or paying next month’s mortgage or car payment, our freedoms explode.

And, our happiness becomes relentless.

Most Important Freedom: Financial Freedom

Happiness is derived through financial freedom. Granted, it’s not the only thing that provides happiness, but freedom from money very often provides the deepest, longest-lasting freedom of all.

Money buys happiness through the freedom to make choices without constant worry about money

It works because:

  • we no longer make decisions based on money alone
  • we can quit our jobs at a moment’s notice when they are no longer right for us and our family
  • we have the time to do anything that we want, like spending time with friends and family, volunteering, adventuring or anything else that truly makes us happy
  • we can move or travel to anywhere in the world

Here’s the truth in all of this: Money buys happiness through the freedom to make choices without constant worry about money.

Money, when used to build a life free from financial worry, provides the incredible freedom of choice. And, the freedom to choose is far more integral to our happiness than the cars we drive, homes we live in and the things that we have.

And so, don’t let anybody convince you that money can’t buy happiness. It can, and it does. But, it doesn’t buy happiness in the form of things – at least, not long term happiness.

Money is a tool that, if used properly, buys freedom.

And the ability to completely control our lives and how we spend our time is a privilege unlike any other.

Don’t just make money. Use money to build a life of freedom.

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I am not a financial advisor. Before making big money decisions, speak to a certified financial advisor for a tailored financial plan made just for you.