Does money buy happiness?

Yes. No.

Yes, money will buy happiness for your basic needs, such as shelter, food, health and security. But no, more money will not buy you more happiness. There are just too many research studies that back this up.

For example, in Stumbling on Happiness, Harvard University psychologist Daniel Gilbert wrote "Psychologists have spent decades studying the relation between wealth and happiness, and they have generally concluded that wealth increases human happiness when it lifts people out of abject poverty and into the middle class but that it does little to increase happiness thereafter. Americans who earn $50,000 per year are much happier than those who earn $10,000 per year, but Americans who earn $5 million per year are not much happier than those who earn $100,000 per year."

I can hear the protests now. Everyone believes -- at some level -- that more money means more happiness. Of course they do. Businesses spend gazillions of dollars trying to convince us that buying their product will make us happy.

What makes the idea more convincing is that when you buy something new, there is some happiness. George Carlin made fun of our chase for more stuff: "The whole meaning of life is trying to find a place for your stuff. That's all your house is, a place to keep your stuff, while you go out and get NEW stuff".

But this happiness is temporary. Sonja Lyubomirsky, author of The How of Happiness, writes "we think money will bring lots of happiness for a long time, and actually it brings a little happiness for a short time." This is called hedonic adaptation, where humans rapidly become accustomed to sensory, physiologic, and major life changes.

So we buy more stuff, something newer, bigger. Not only are there constant advertisements designed to brainwash us to spend more, and not only is there instant gratification, although fleeting, when we buy more, we inherently crave new experiences. No wonder everyone is convinced money is the key to happiness.

But the commercials that imply you must spend money to be happy are lies. The excitement you feel when you buy something is only temporary. And money is not necessary to satisfy the cravings for new experiences, since there are many ways you can explore for free.

When you realize both in your head and in your gut that being rich will not make you happy, you stop spending your energy chasing after more money, and spend your time appreciating the stuff sitting in your house right now, instead of out shopping for new stuff.