Can money make you happy?

Ah, the age-old question: Can money buy happiness? While the question is simple, the answer is anything but simple.

“Happiness” itself is difficult to define and varies from person to person, and when you factor in things like cost of living and cultural differences, it becomes even more difficult to quantify.

Is there a price for a Filipino’s happiness?

Several studies have attempted to quantify happiness. One such study from Purdue University examined whether happiness increases indefinitely with income. The study found that people in the United States needed $105,000, or just over 6,000,000 pesos, annually to achieve happiness.

Consumer website Expensivity went a step further by contextualizing the results. Using Purdue’s estimates, they calculated the “price of happiness” for countries around the world, taking into account World Bank purchasing power and the cost of living.

According to their data, Filipinos need $28,264 per year, or about 130,000 pesos per month, to be happy. This amount is almost a third of the average annual family income, based on the latest figures from the Philippine Statistics Authority.

“I don’t think we need to give too much weight to US studies on money and happiness because their context is very different,” said Dr. Anna Cristina Tuazon, Associate Professor at the Department of Psychology at UP Diliman.

“Our reality is that most Filipinos are struggling financially due to high cost of living and very low wages. Even the middle class is struggling with food and utility costs, not to mention travel costs,” she added.

The numbers may not accurately reflect the reality in the Philippines. According to a study, 7 out of 10 Filipinos struggle to cope with their financial and credit issues, making the Philippines the most stressed country when it comes to managing household finances.

The desire for financial stability remains a strong motivator for many, as many hope to improve their quality of life and pursue happiness.

Review of the hierarchy of needs

To better understand human motivations and the factors that drive happiness, let’s take a look at one of the most well-known motivation theories: Maslow’s Hierarchy of Needs.

The American psychologist Abraham Maslow, who proposed this theory, wanted to understand what makes people happy. He believed that everyone has an innate desire to reach their full potential, but to achieve this ultimate goal they must first meet a series of basic needs – and these needs must be met in a hierarchical order, from the most basic to the most advanced .

The theory is presented as a pyramid with five levels starting from the bottom: physiological, safety and security, love and belonging, appreciation and self-actualization. Maslow argued that individuals cannot fulfill higher needs until lower needs are met.

With this model in mind, it’s easy to see why many Filipinos struggle with happiness. Since most of the population falls into the lower income brackets (58.4%) and middle class (40%), most people focus on meeting their basic needs and have little left to achieve higher goals.

“Our average wage is around P18,000, so we still have a long way to go before money no longer contributes to life satisfaction/happiness. Money alone does not guarantee happiness, but for Filipinos it goes a long way,” said Dr. Anna.

“Fundamentally, money can eliminate the pain points in life by eliminating excessive hardship and suffering in everyday life. Only when we are sure that we can satisfy our basic needs can we focus our attention on other needs,” explained Dr. Anna.

Money solves many problems… but not all

When we look at money through the lens of Maslow’s Hierarchy of Needs, we realize that money itself doesn’t directly make us happy – it’s not even in the pyramid!

But what we can afford with money—a comfortable life, food on the table, guilt-free vacations, and the ability to pursue hobbies—enriches our experience on every level, from basic survival needs to personal growth.

“Can money make a person happy? If it’s about sparking joy or creating unforgettable moments, then yes! “Money can buy things that make us temporarily happy,” said Val Baguios III, organizational leadership coach/consultant.

“Just today I bought my wife a bracelet – it cost money and made her smile. Money is a useful tool to fulfill our needs and generate positive emotions. But I have seen it, both in my life and in the leaders I have coached, that true and lasting wellness comes from nurturing the most important relationships in our lives. Sustainable happiness comes through these connections and not just through material things.”

A joint study by researchers at Princeton University and the University of Pennsylvania found that, on average, higher incomes are associated with increasingly higher levels of happiness — except for a small group, about 15%, where happiness ranges from $60,000 to $90,000 per year.

For this group, higher income does not significantly increase happiness. The authors explained that this income limit may represent the point at which remaining misery – such as grief or heartbreak – is not alleviated by wealth. As one lead author put it, “When you’re rich and miserable, more money doesn’t help.”

The author also pointed out that money is just one of many factors that contribute to happiness: “Money is not the secret to happiness, but it can probably help a little,” he added.

While money alone may not guarantee happiness, it does provide the stability and security needed to navigate life’s uncertainties, such as losing a job or becoming ill. It helps us satisfy basic needs and pursue personal goals that can lead to happiness. In this way, money may not directly make us happy, but it allows us to achieve the things that do.

– LA, GMA Integrated News