ARE YOU sick of hearing that money can’t buy happiness? If so, you’ll love the latest news. According to an increasing number of studies, it can – but only if you know the right way to spend it.

No sooner do you start talking money and happiness than words like ‘shallow’ and ‘materialistic’ creep into the equation.

But stop right there. Are we really stupid enough to believe that a plasma screen, fancy frock or fast car will make us happy? Since when was money good only for buying material possessions? What about all the other things it’s good for? Surely they can factor in to how happy we are?

There’s been endless research on this topic, primarily undertaken by economists and psychologists (yes, they go together, like … money and happiness …).

And for every one study that tells us that money can’t buy happiness, another says it can.

When money does not buy happiness

A cornerstone of the ‘money can’t buy happiness’ argument is that many major international studies undertaken since the 1950s show no significant rises in happiness levels despite steady increases in average earnings and material possessions over the same period.

A number of other studies show that, after a certain point, the law of diminishing returns applies in the money and happiness equation. Thus, argue many researchers, the second million doesn’t provide as much satisfaction as the first.

Another argument posed is that, to earn more, you must sacrifice time spent doing things you enjoy and take on the increased stress and workload involved in higher salaried positions. You are also likely to take on the trappings of your ‘success’, for example, a bigger home and higher debt and all the increased responsibility that goes with it – booking the kids into expensive private schools and so on.

This idea is linked to the so-called ‘hedonic treadmill’, often cited as the real nail in the coffin for the money can buy happiness brigade.

This can be summarised as the desperate human desire to ‘keep up with the Joneses’. If you’re trapped on the hedonic treadmill, no matter how much money you earn and, in particular, how much stuff you buy, you will never be happy because you are constantly comparing yourself (or more particularly, your money and ‘stuff’) to others. Someone else will always have more than you do. In fact, you may even become less satisfied with your lot than someone with far fewer dollars and possessions because you are unable to find contentment.

So what's the secret of happiness?

The above are just a few of the arguments posed to suggest that money can’t buy happiness.

However, just as many studies show that this is not the case.

Income consistently rates as a significant determinant of happiness – generally coming just after the number one decider on the happiness rating scale: good health. Wealthy people are more likely to be healthier than poor ones.

Further, other factors that are key include education (more is likely to make you happier) and marital status (married people or those in long term relationships tend to be happier). Again, the wealthier you are, the more likely you are to have more education.

And while there may be a more blurry line when it comes to marital status (divorce is an equal opportunity visitor), we do know that money – or lack thereof – is a key stressor in relationships and that, of those marriages that do end in divorce, it is the parties (man and woman) who can be adequately provided for financially that are more likely to recover and report being happy afterward.

However, these factors, while very important, are far from the full story when it comes to what makes us happy.

Once upon a time a person’s happiness was considered a matter of chance (where, when and to whom you were born, for example) and temperament – some people just have sunnier dispositions than others. These days, the growing school of what’s known as ‘positive psychology’ argues that happiness is like a skill that can be learned.

Is it all in the mind?

Rather than focusing on the who, what and why of negative states such as depression and anxiety, positive psychology examines the who, what and why of optimism and thriving.

By isolating the characteristics of happy people, positive psychologists hope to help others learn how to be more fulfilled and optimistic. Research in this field in recent years has come up with various factors that seem to predict happiness – with some of the most frequently occurring listed as follows.

• Good relationships and lots of human connections. While a large study undertaken by the University of Chicago’s national Opinion Research Center found that around 40% of married people were ‘very happy’ compared with just 25% of the never married, it also found that those with more than five close friends were 50% more likely to be ‘very happy’ than those with fewer.
• Finding your passion. Actively throwing yourself into your work, play and relationships is more likely to make you engaged, absorbed and fulfilled – yes, happy – than choosing passive pursuits.
• Focusing on the future, not the past. This is a key characteristic of happy people, who when questioned about negative or unpleasant experiences, tend universally to have only a hazy recollection of them, to interpret them in a positive way and do not dwell on them, thinking instead about their next move, so to speak.
• Not comparing yourself with others. The best way to avoid the hedonic treadmill.

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