We've long been pummeled by the phrase "money can't buy happiness." But does this "wisdom" hold up in real life, in 2021? Leading money coaches and financial industry experts weigh in.

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Is it true that "money that can't buy happiness?" The famous saying originated in a 1750 proverb that said, "Money buys everything, except for morality and citizens." It has evolved to the phrase we've often heard repeated on TV and in self-help books. But how much truth is behind the saying?

According to a study conducted by Princeton University in 2010, a person's happiness increases until they reach an annual income of $75,000—and then plateaus. Meanwhile, a more recent study from Purdue University found that emotional well-being can be achieved well on a salary that's between $60,000 and $75,000. However, participants who earned a $105,000 salary noted that their happiness had decreased since previously earning less.

According to Shari Greco Reiches, wealth manager, behavioral finance expert, and author of Maximize Your Return on Life, this money-buying-happiness (to a certain extent and not beyond) logic centers on the adherence to adaptability—aka "lifestyle creep."

"For some people, money does provide happiness," Reiches explains. But, "for a majority of people, they adhere to the concept of adaptability," which undermines the happiness money could have bought. For example: "You graduate from college and get your first apartment, and you're so happy," Reiches explains. "Then, you adapt to it. And then you want the high-rise apartment with the amenities—and adapt to that. Your first car is a clunker, and you're happy until you want the Tesla. You start to adapt, and you keep thinking you need this money to be happy to adapt to the next level. It's a slippery slope, because you keep planning, yet you're never happy where you are today. Once you have the basics covered and you have some discretionary money, [staying put, income-wise], will bring you more happiness than the adaptability train."

Still, some argue that money can indeed buy happiness—beyond $75K per year, too. In a time when unemployment rates have reached 5.4 percent, pay inequalities against minorities and women aren't improving, and student loan debt in the United States is 1.71 trillion dollars and growing, the phrase "money can't buy happiness" can feel condescending—and tone-deaf to the real financial struggles of folks whose happiness would absolutely be increased if they were to make or come into more money. 

Here's what leading money coaches and other experts in the financial industry think about the claim that "money can't buy happiness," and whether that assertion holds up in real life in 2021.

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You can't buy happiness—but money is a tool to get you there.

"When I hear the phrase 'money can't buy happiness,' I instantly think that money can...when used to achieve life goals," explains Brittany Charles,  financial coach. "In recent years, money has brought me financial peace. Currently, I'm focused on financial independence and freedom, which requires me to use the money I earn to invest and grow so I can achieve that. [That, in turn] will contribute to my overall well-being and make me very happy."

Justin Duncombe
Credit: Justin Duncombe

Money contributes to happiness.

"As a comedian once said, 'no one is frowning while riding a jet ski,'" explains Justin Duncombe, financial advisor and the author of College Bound Strategies. "So money can buy moments of happiness. But long-term happiness comes with a purpose. The money just contributes to what you can do. In that context, I would agree with the idea that money doesn't buy happiness. But I do believe there is a secondary connection between money and happiness. Money certainly can open doors, and let someone have more fun—but money without purpose is dangerous. Retirees with money and no purpose often fall into bad health and pass within years. People who get money with no responsibility [will likely end up] wasting it. While money can certainly help happiness, purpose is also needed."

Inspired Budget
Credit: Inspired Budget

Money "buys" peace of mind.

"Over time, I've realized that I was using the phrase 'money can't buy happiness' out of a scarcity mindset," notes Allison Baggerly, budget expert and content creator for Inspired Budget. "Years ago, I believed I would never thrive with money. We were two teachers in over $100K of debt. I figured I was destined to live the paycheck-to-paycheck life forever. When I heard the phrase, 'money can't buy happiness,' I thought, Of course it can't! I can be happy even if I don't have a lot of money! But, as I've faced my scarcity mindset head-on, I realize I was interpreting that phrase in a too-literal sense. While money can't buy an emotion, it can evoke emotions in us. Money is emotional: It seeps into our everyday life, so how can it not be emotional? And I've realized that when I have less control over my money, I am more anxious, stressed, and frustrated. These emotions seep into my relationships and workday."

"On the flip side," Baggerly continues, "when I have more control over my money and savings in place, I feel lighter. Money is emotional, and it's OK for it to affect you on an emotional level. The goal is to make sure money is affecting you in a positive way. I honestly feel a lot less stressed when I have a fully stocked emergency fund. The absence of financial stress or anxiety makes me a happier person."

Carmen Perez
Credit: Carmen Perez

Money "buys" time.

"I used to think money couldn't buy happiness, but now I think money can buy you time. Money can buy options and time to do what you want; that all plays into happiness," says Carmen Perez, money coach and content creator for Make Real Cents. "I can say 100 percent that I am happier now without debt. Before...I always had my debt looming over my head, and it would take over my day. Saying money can't buy happiness feels different now without debt. I don't say it to others, because I'm empathetic to how it may make them feel, but I do think the phrase can be motivating for others depending on their current situation and how they define happiness."

Andre Henry
Credit: Andre Henry

Money "buys" perspective.

"Money plays a role in how you perceive life... It can make you happy for a moment, but it won't ever bring joy. Still, the phrase 'money can't buy happiness' can be troublesome depending on who's saying it," adds Andre Henry, financial educator for wealth management. "It feels different coming from a trust fund baby who has never struggled financially a day in his life than it does from someone who was once poor and then came into money. Who delivers the message matters."

"I grew up poor and was teased a lot for it," Henry adds. "I thought if I could work hard to help provide for my mom, I'd be happier. Then, she died, and I was an orphan. Now, making money is an empty feeling because I do it out of habit. It feels good to protect my family with money, but I'd give it away if I could have my mom back."