Money does buy Happiness, if you spend it that way. Your Money Identity is defined as your consistent underlying thoughts, feelings and resulting behaviors around money over a period of time.
Money Identity determines how you cope with Money stress. And coping usually falls into 2 categories:
Money stress Avoidance: the propensity to reduce stress by avoiding any stress related to money, through unhealthy coping like distractions, suppression, or denial
Money Stress Resilience: the propensity to reduce stress by addressing the underlying issues, challenges and circumstances that create the money stress
We get caught up in the argument if Money can buy happiness or not. Ultimately the answer is as in most things..it depends. But not for the reason most people assert. Most people will attest that money gives people in poverty and moments of financial hardship the opportunity to pay for things that will ease the burden of stress. Yet, it has less to do with your financial standing and is more about how you actually will use the money. Simply put if you use money to practice Money stress resilience it can buy happiness but if you use money to pursue money stress avoidance then it won't.
Research has proven that the reduction of stress is associated with more happiness. Furthermore, there have also been more studies that have determined that your outlook on stress also determines your relative happiness. People who practice Money Stress Resilience are more likely to see stress as a good thing. They will see stress as a natural part of the process to reach financial success, as in NO PAIN, NO GAIN. However, Money Stress Avoidant folks most likely view stress as negative as a whole and will try to avoid it at all cost.
Lower stress is associated with More Happiness but More money does not necessarily determine less stress. The only indicator that can determine your level of money stress is your Money Identity. Moreover, the most important aspect to realize is, an amount of money is not the determining factor in reducing stress or increasing happiness for that matter, you are.
When people are faced with a stressful financial situation and given more money the fact is some people will use it in money stress avoidant ways and some will use it in money stress resilient ways depending on their Money Identity.
Money stress avoidant folks have difficulty facing stressful situations and circumstances head on whether they are money related or not. Think of folks who avoid having uncomfortable conversations at all costs. So people who tend to think that money can solve ALL their problems, indicates that they do not believe in their ability to face challenges when they arise.
The truth is if you are money stress avoidant your are also opportunity avoidant. As most financial opportunities have some inherent risk and as a result may lead to stress associated with uncertainty.
But real financial success and freedom comes from pursuing opportunities and Money Stress Resilient behaviors that the result of which not only increases your bank account but also strengthens skills that can increase your resilience, emotional intelligence, GRIT and Happiness.