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Does money make you happy?

Increasing income or wealth can lead to an average increase in self-reported happiness levels, but only up to a certain point.
Liz, could you tell us a bit about Happy City, what it is and what it does please? Well, Happy City is a charity and social enterprise. We’re based here in Bristol, but we are working more and more nationally and even internationally and the aim of Happy City is to try and help make a shift in the thinking, action and policies that can put wellbeing of people and planet at the heart of how we do things. One of our areas of work is training. We do a lot of training in communities and businesses and organisations all over the place.
And a lot of that training is based on things like the five ways to wellbeing which are really simple practical tools for people to, you know, connect more with other people and find more meaning and be more active and those things are all good for their wellbeing. 00:01:01.760 –> 00:01:06.750 We had a challenge of taking that thinking into prisons and we worked with the prisoners in Bristol
prison which is a very, very exciting project with some prisoners who are locked up for 22 hours a day and it’s very hard to go in there and talk to some pretty tough nuts about how about how to be happier and how to improve their wellbeing. Possibly the thing I’m most proud of, in our whole training history, is some feedback we got once from a prisoner who’d been in prison for a very long time and said to me, ‘Liz if I’d known this stuff ten years ago I wouldn’t be in here.’
Now that’s quite powerful feedback for a project that can, to the outside world, seem a bit of fluffy but actually they’re such deep rooted personal and individual activities that actually understanding what brings us wellbeing can have huge, huge impacts in the rest of your life. And what in society can support creating this sense of happiness, resilience, wellbeing? Yeah, so it’s really, really interesting isn’t it and I think this is another reason why it started to get traction because there’s more and more evidence, there’s more and more research, and you know more and more people around the world are starting to understand the detail of it much better because it’s being taken seriously.
So there are sort of two elements if you like, there’s the kind of, are we creating the right conditions in a place and then how are people feeling and functioning in their everyday lives? So what do we need to do in terms of the conditions, they’re quite complex but you wouldn’t be surprised at many of them. The economy doesn’t disappear, we’re not suggesting money’s a bad thing, you know people need jobs. Importantly they need more security in their jobs and more meaning in their job, so it’s not just jobs for jobs’ sake but yes, work, economy is important. It’s an important part, we need to make sure that, you know, we get rid of poverty.
Poverty and unemployment are desperately bad for your wellbeing but other important elements like health and education, social connections, both close ties and looser ties. Green spaces, we’re in a perfect spot here, and over here people are enjoying nature, they’re enjoying each other, they’re connecting they’re relaxing, they’re finding meaning in their lives. And so there are many, many things but my experiences is, it doesn’t matter which community you talk to, people know what brings lasting wellbeing. They’re not necessarily acting on it, but they know what it is and I find that very liberating. Could you tell us more about, for you, what is happiness? As you say some people feel that the word ‘happy’ is a bit fluffy.
How can you give edge to that word?</b> Great question, how can I give edge to the word ‘happiness’? So we chose ‘happiness’ and we had a lot, you know when we set up Happy City seven years ago, we had a lot of resistance to using the word ‘happiness’. Everyone said no one will take you seriously and of course there’s an element of truth to that, because the word happiness has been hijacked by every advertiser, every product placement wants to use the word happy. The reason we use the word happy is because of that universality I mentioned earlier.
If you ask anybody what they want for their kids, they don’t say ‘I want them to have wellbeing’, they don’t say ‘what they need is a bit of resilience’. They might mean all those things but let’s use the language of normal people, it’s one of the reasons we’ve been able to reach out to everyone from really senior politicians, through to you know newly arrived refugees, or the prisoners I mentioned earlier. So if you think about the key ingredients for wellbeing and then you think about what happens if those are missing, you start getting some very, very fundamental societal challenges. So, when people have a lack of wellbeing, you get things like lack of self care.
So you have huge impact on health, on relationships, on family breakdown, on societal breakdown. You can get huge, significant impacts on crime but actually a lot of crime can be rooted back into some very, very deeply personal or community wellbeing deficits. You can get things like addiction, you know people fill the void in their life with other things and those are also deeply expensive for society. But even at a very purely economic front, happier people are more productive, they’re good at solving problems, they are better at working together, they turn up for work much more often. You know, the financial implications of supporting wellbeing are fantastically positive.
For you personally your someone who immerses yourself in happiness, understanding research and engagement. What is happiness for you? That’s such a hard thing to do because I talk about so much of it, so much of the time. I think if I had to distill it down to two words, it would be ‘connection’ and ‘meaning’. So finding meaning and being connected to those around me brings me happiness and I know they bring happiness universally, I think, to humanity. Thank you very much, been great speaking with you. It’s a pleasure.

Academic research has found that an increase in a person’s income or wealth can lead to an average increase in their self-reported happiness levels, but only up to a certain point. Beyond this, more money has little long-term impact on happiness. This pattern is also found at a societal level: an increase in a country’s GDP will lead to an increase in average happiness in a less developed country, but other factors have more impact on more developed ones. (Easterlin 2013)

One factor believed to contribute to this effect is that money and the opportunities it can buy are good at helping people to avoid some situations which cause unhappiness and stress, such as certain health problems, malnutrition, lack of education, or insecure and temporary housing. However, when someone has ‘enough’ resources to fulfil their basic needs, other factors, including the choices made in life and the shape of the wider society in which the person lives, have more of an influence on day-to-day happiness than increased wealth. (Kushlev et al, 2015)

Introducing Happy City

Happy City, now known as the Centre for Thriving Places, is a Bristol-based charity that promotes happiness, wellbeing, and a positive quality of life as a policy objective. It also provides education and engagement, particularly among less well-off communities, to give individuals tools to build more happy and satisfying lives.

Easterlin, R. A. (2013), ‘Happiness, Growth and Public Policy’, Economic Inquiry, p. 51: 1-15
Kushlev, K, Dunn, E.W, Lucas, R.E, (2015) ‘Higher Income Is Associated With Less Daily Sadness but not More Daily Happiness’, Social Psychological and Personality Science, Vol 6, Issue 5, pp. 483 – 489
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