There is a myth that says money makes you happy. This is embedded into popular culture. Money Makes The World Go Around, Money (That’s What I Want), Money, Money Money to name but three examples.
There’s another myth that says money doesn’t make you happy. Can’t Buy Me Love, Price Tag, Life In The Fast Lane to also name but three.
There’s also about a gazillion blues songs which suggest that a lack of money is the source of all of the singer’s troubles.
So who is right?
It feels absurd to say that money doesn’t bring happiness. A certain amount of money is needed for food and shelter. And ask someone who has received a bonus at work and can now go on a holiday if that money has brought them happiness.
But there is surely a limit?
Give a hungry person enough money for a sandwich and you will have a significant impact on their wellbeing. But give Bill Gates an extra million pounds and it will be unlikely to bring him any extra happiness. Somewhere between these two extremes surely sits a tipping point, the moment when an extra fiver won’t bring any extra happiness.
I remember doing an experiment in science class on the subject of saturation. We had to pour salt into a glass of water. First a teaspoon. It was absorbed by the water. Then another. That too disappeared. Eventually we were putting in one grain of salt at a time. Eventually a grain did not disappear, and we knew that the water was saturated and could not absorb any more salt.
What is your wealth saturation point?
What is your answer to the question ‘How Much Is Enough’?
In order to answer this question, you first need to work out what makes you happy. Financial planning is really very simple – work out what you want from life, then spend your money on that.
We produced The Financial Wellbeing Book in order to help people through this process. Understand how money and wellbeing interact, then apply this to your life. We also run Financial Wellbeing Workshops for employees with the same objective.