Simply put: Money is a facilitator of commerce – a social necessity. This ability to trade goods and services is essential for our survival, yet the question remains, to what point is money vital to our happiness?

Whether or not money can buy happiness is a looming question at the core of so many of our quests for contentment. At an individual level, higher income and greater independence are associated with higher well-being. While money is a medium of exchange, wealth is a state of abundance – a measure of both physical and psychological well-being. Wealth encompasses a sense of fulfillment within our relationships and activities we enjoy, pursuit of goals we are passionate about and the feeling that we are a part of something greater than ourselves.

Money may measure wealth, but it is not all encompassing of what wealth means. It is easy to become so consumed in the act of accumulating money that you can forget to enjoy life – neglecting family, skipping vacations or simply forgetting to recharge with time of leisure.


While money is a medium of exchange, wealth is a state of abundance – a measure of both physical and psychological well-being


While there is no denying that money effects our mentality, it doesn’t add value to our well-being unless we make good use of our finances. When does money trigger bliss? When we know how to effectively accumulate, save and spend it. Money, if properly used, can facilitate in the creation of the proverbial wealth.

Here are five ways money can have an impact on your well-being:

1. Sharing our wealth

Money evokes happiness when we spend it on others – when we share it. Science proves it. Giving activates the same areas of the brain responsible for pleasure, personal connections and trust. Altruism releases endorphins creating a “helpers high,” which can be quite addictive.Studies show that serving in the role as a “giver” boosts well-being in several capacities: lowering blood pressure, increasing self-esteem, lowering stress levels, increasing lifespan and, of course, happiness. 

2. Doing what we love

As wealth goes up, happiness goes up at the same rate, only up to a certain point. After this level of financial Independence, each progressive increase in wealth attracts a lesser increase in happiness. 

Reaching some level of financial independence has it benefits because money can free you from the rut of monotony when working a job you don’t enjoy. You are able to take more risks in order to pursue what you love. If you’re working solely to make money just to get by, then you’re dedicating a majority of your life to something you don’t love – resulting in a somewhat miserable existence. Work becomes an unfortunate burden. But, if money is simply a by-product of doing something you love, it becomes a life well lived.

3. Personal performance

Recent studies have shown that money plays a significant role in personal performance, interpersonal relations and behavior. When people are reminded of money, performance improves and sensitivity toward others declines. Money encourages people to take on more work and show greater persistence in difficult tasks. Interestingly though, when exposed to money, people tend to spend less time helping people and gravitate more toward solitary activities. People want to work hard to achieve their financial goals and consequently, focus less on others – allowing money to be a barrier to intimacy. Be cognizant of this innate reaction and attempt to balance performance with compassion.

4. When disability strikes

Having a financial fall back helps to ensure well-being when we experience health setbacks. Happiness doesn’t depend on our financial state – but, when our health fails, money matters. Research suggests that half of bankruptcies are linked to health care costs. Financial stress can be detrimental to both our physical and mental well-being. Money may not buy happiness but neither does poverty.

5. Financial stress negatively impacts health

People with high debt are far more likely to report health problems. Studies show that those who have chronic worry about their financial situation are twice as likely to suffer from a heart attack as those with financial stability. For instance, 27% of people with financial stress report digestive problems; 44 percent report headaches and 23 percent suffer from depression.

While money can’t directly grant you bliss, it can serve as a ladder up the hierarchy of needs – freeing you from the worry of accumulating what you need to survive and allowing you to focus on your ultimate goals in life.

Remember, money directly effects well-being only to the point of stability, after which it is completely up to you to create a life you deem worthy. Use money as a means to an end – the end being a life filled with satisfying relationships and activities you enjoy most.