Studies have consistently shown that money can increase happiness, especially when it meets basic needs and provides a sense of security. When you’re not worried about how to pay the rent, put food on the table, or handle an unexpected bill, life feels far more manageable. That foundational sense of stability matters deeply.
Previously, research undertaken by Daniel Kahneman and Angus Deaton indicated that happiness tended to plateau for those earning US$75,000 per year. In contrast, updated research by Matthew Killingsworth has found that the relationship between happiness and income actually continues further up the income scale.
maslow’s hierarchy of needs
Let’s look at it through the lens of Maslow’s Hierarchy of Needs. Maslow’s model is a psychological theory that explains human motivation as a pyramid with five levels — starting from basic survival and building towards self-actualisation. Money plays a key role in helping us move up that pyramid.
- Physiological Needs – food, water, shelter. Money directly covers these. Without it, stress, scarcity, and survival-mode take over.
- Safety Needs – financial security, health, stability. Again, money enables this — from paying rent to having insurance or a savings buffer.
- Love & Belonging – relationships, community. Money doesn’t create love, but it can support social connection — travel, celebrations, time with loved ones.
- Esteem – respect, confidence, achievement. Being in charge of your finances can boost self-worth. Earning money in alignment with your values fuels pride and purpose.
- Self-Actualisation – fulfilment, growth, contribution. At the top, it’s not about money itself, but how you use it to live out your highest potential. That might mean starting a dream project, giving generously, or creating more time freedom.
where the relationship with money & happiness shifts
Once the essential needs are covered, the relationship between money and happiness starts to shift.
It’s not about how much you have — it’s about how you use it. Money used in alignment with your values, vision, and purpose (all covered in the Money Mindset Reprogram) tends to bring more joy. Think: investing in experiences, supporting loved ones, giving to causes you care about, or building a life that feels authentically yours.
On the flip side, if money is tied up in pressure, comparison, or avoidance, it can feel more like a burden than a blessing (no matter how much money you earn or have). There is even early evidence that earned income is more highly linked to life satisfaction than wealth received through inheritance.
true wealth
True wealth isn’t just about financial figures. It’s about emotional freedom, time freedom, empowered choices, and a deep sense of alignment with how you live, spend, and thrive.
So, does money buy you happiness? Not directly. But when you’re intentional with it – when it becomes a tool rather than a trap – it can increase happiness through having greater choice. True happiness comes from knowing what matters to you, and aligning your finances to reflect that.
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Suzanne X
Live your abundant life
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