Money and Happiness

The book “Doing More with Less” by Bruce Piasecki1 emphasizes the importance of frugality.

The author is a fan of Benjamin Franklin…

One of Benjamin Franklin’s major insights into human nature is that frugality and industriousness are the ways to wealth.

However, frugality is hard because we are constantly urged to spend money… I even allude to spending in my footnotes below.2

Happiness and Having vs. Spending Money

A study by Daniel Kahneman and Angus Deaton found that the link between money and happiness existed, but only up to about $75,000 in annual income.

The authors concluded that high income came with life satisfaction, but not happiness.

Another study led by Grant E. Donnelly of Harvard Business School found that life satisfaction increased above the $75,000 mark… But not until earners reached $8 million in net worth. Then, satisfaction levels remained flat, again, until the $15 million net worth threshold…

But increases in satisfaction were only marginal.

Also, individuals who earned their wealth, as opposed to inherited it, were happier than those who had not earned their wealth… Perhaps no surprise there. Working hard, conquering your fear, being in the arena, may contribute to higher levels of satisfaction.

None of this research suggests causation between amounts of money and happiness… For instance, happier people may be more successful at earning money.

One thing that’s NOT mentioned or even suggested, though, is that spending money leads to happiness.

Having money may have something to do with happiness…

Spending money? Not so much.

Of course, marketers try to convince us to spend by conveying benefits of their products and services:

  • Security
  • Status
  • Comfort
  • Safety
  • Acceptance
  • Happiness

But few of these things can be purchased in a meaningful way…

Practicing frugality makes sense and strengthens our self-reliance.

You are truly better saving your money and heading over to your local public library.


  1. Available from $1.25 used on
  2. Buying a book on frugality probably doesn’t make sense if it’s available at the library for free.