Money can not make you happy, but a lack of it can definitely make your life miserable. If you can not afford a thing and you are constantly scared of how you will go through the next month, you do not have time to be happy.
Money can contribute to happiness to a certain point. It is an enabler of happiness. It is hard to be happy if you are poor and drowning in debt.
Happiness levels increase with income up to roughly $75,000 in annual salary. After that, there tends to be little correlation between income and happiness.
The magical amount of money is somewhere between 2 and 3 times of an average salary. After that money has zero contribution to your happiness level.
The reason that money demonstratively increases happiness levels up until a point is that it takes a certain salary to feel financially secure.
Having enough money means no anxiety. Fundamentally, having enough money to buy these basic necessities will no doubt increase your happiness levels.
Your conditions do not define your happiness, unless you let them. You probably think that you would be happier if you had more money.
You might actually be right. You might be very wrong. Lots of things that can affect your happiness – some you can change and some you can not.
The formula for happiness turns out to be fairly straightforward: H = S + C + V.
H stands for sustained happiness. Not the kind you get from a piece of chocolate cake or a great first date but rather the kind of ongoing happiness you carry with you throughout your life. The type of real happiness Humans long for and our Founding Fathers had in mind.
S stands for individual set point. This is your natural level of happiness, akin to your body temperature or your heart rate. They may go up or down for periods of time, but your temperature and your heart rate will settle back to your natural, steady state.
When it comes to wealth and your set point happiness, even lottery winners eventually settle back into their previous level of happiness. There is a wide range to set-point happiness, and some people are naturally happier than others.
Less than 50 % of your happiness is attributable to your set point, which means you can control much of your own happiness if you choose to.
C stands for conditions in your life. These are the things you can not change in your life, such as your race, age, or childhood family situation, and things that may change slowly over some extended period of time, like marital status and occupation. Think of conditions as the elements of your life that remain relatively constant from one day to the next.
V stands for voluntary activities which you have immediate control over. Prayer, meditation, social involvement, exercise, and volunteering are all examples of the kinds of choices you can make regarding your time, money, and energy from day to day and hour to hour that can have a lasting impact on your happiness.