Money doesn't make you happy, but it can make you less sad

Can money bring you happiness? A new study says that in fact, while money cannot increase your joy, it can decrease your sadness.

Psychologists and behavioural scientists from University of British Columbia and Michigan State University decided to analyse the link between money and sadness, which is rarely researched.

Their study, entitled Higher Income Is Associated With Less Daily Sadness but Not More Daily Happiness, is published in the journal Social Psychological and Personality Science.

Looking at US census data of 12,291 people, the researchers analysed their income, together with reports of how happy they were.

They discovered that people who were well-off didn't necessarily become happier by having money, but when they had to deal with an emergency situation like having a leaking roof, with money in the bank they were much less sad than people on a lower income.

Lower incomes can lead to sadness

For people who couldn't afford to pay for a leaking roof, experiencing sleepless nights worrying about being able to solve the problem could lead to sadness.

"Money may be a more effective tool for reducing sadness than enhancing happiness," researchers Kostadin Kushlev, Elizabeth Dunn and Richard Lucas wrote in the paper.

The researchers say that happiness and sadness are two distinct emotional states, rather than being complete opposites.

"Although extensive previous research has explored the relationship between income and happiness, no large-scale research has ever examined the relationship between income and sadness," the researchers wrote.

"We show that higher income is associated with experiencing less daily sadness, but has no bearing on daily happiness."

So, what can make you happy?

A survey conducted in October by wealth management research provider Spectrem Group found that people who are super rich can still be pretty miserable, as they constantly focus on financial matters such as how well their stocks are doing, and experience great anxieties.

These people achieve far more satisfaction from investing or saving their money than in spending it.

Other research published last year by Dunn, together with Michael Norton, an associate professor of marketing at Harvard Business School, found that people could be happier if they spent their cash on other people, rather than material possessions.

"Shifting from buying stuff to buying experiences, and from spending on yourself to spending on others, can have a dramatic impact on happiness," Dunn and Norton wrote in the book Happy Money: The Science of Smarter Spending.

The researchers found that people who spent money on holidays gained more happiness from the experience rather than material goods. An increase in happiness was also seen in pre-paying in advance for an experience, as it allowed time for positive expectations to build up.