The Price of Happiness

“Money doesn’t bring you happiness, but it brings you the freedom to find it.” - H.G. Mewis

There are lots of ways to cultivate happiness. Spend money on experiences, not stuff. Stop complaining, controlling and comparing. Hack away at life’s unessential ties. But there is one topic that’s less popular to discuss probably because people feel it’s out of their control. That topic is the link between money and happiness.

The popular saying, “Money cannot buy happiness,” is true, but only to a point. Multiple studies link these two factors and, as it turns out, there is a price tag on happiness. It’s $75,000.00 in income and no debt.

Interestingly, after earning $75,000.00, the joy factor of cash plateaus. They speculate that people with more money lose their gratefulness and appreciation for desired things that are not difficult to acquire.

What experts are sure about is that living under the threshold of $75K means less happiness. Some say it’s because it’s frustrating not to be able to buy things in a consumerist society. But studies point to a more worrying issue -- having less money means more debt and there is a strong link between debt and poor mental health.

Does being poor cause mental health issues or do mental health issues keep you poor? They’re still not sure. But they do know that these are peas in a troubling pod.

Your Debt is Depressing You

A compilation and analysis of over 65 different studies has found that those in debt are three times more likely to have a mental health issue related to anxiety and depression. Worse still, people who complete suicide are eight times more likely to be in debt.

It’s messing with your physical health too. An Ohio State University study showed that the stress of credit card debt was linked with worse reported health. And a Northwestern University study showed that financial debt is linked with poorer health and higher blood pressure.

Not All Debt is Bad

Your mortgage is exempt from this phenomenon. A 2004 study published in Housing Studies found that homeowners have lower levels of psychological distress compared to renters. Experts speculate that secured, long term debt is seen as investment versus true debt.

It’s the unsecured, short term debt that really gets to people. In other words, it’s the credit cards.

But there’s another debt that’s plaguing a new generation. Student Loans. Studies on carrying these debt are just now emerging, but the data doesn’t look good. This University of South Carolina study found increased stress levels and feelings of depleted health can surface from accumulating student-loan debt. Surprisingly, student debt affected mental health regardless of a person's socio-economic situation.

So when you’re looking into increasing your happiness via exercise or positive imagery, don’t forget the debt. It’s playing a major role in your mental health and should not be ignored. For steps on how to cope and better manage debt, see this great article from the Federal Trade Commission, Coping with Debt, which gives unbiased advice on self help, services, consolidation and other strategies.