Posted by Mike Smith :: October 19, 2007 @ 6:36 am

The question of whether money can buy happiness has probably been asked for as long as money has been around. The answer that you get will likely depend on who you ask. In her recent Newsweek article, Sharon Begley provides some interesting commentary on the subject.

The basic answer provided in the article is that your current financial situation will likely dictate whether money will buy you happiness. It cites research showing that when money is capable of bringing people out of poverty, it often does bring happiness as well. More money for those in the middle class and above, however, tends not to bring any additional happiness. Of the reasons given for this, I found two to be particularly interesting:

Too Many Choices

With added wealth comes added opportunity to choose what to do with your money. Having too many choices can be overwhelming and lead to indecisiveness and unhappiness.

Increase in Needs

With more disposable income, the things that you consider needs are likely to increase. Spending money on needs isn’t as pleasurable as spending money on wants, even if those needs are just perceived to be necessities.

So what does buy happiness once your basic needs are met? It would seem that friends, family, and the way you spend your time are the most influential. As most people work full time, your job satisfaction plays an important role in your overall happiness. So surrounding yourself with people whom you enjoy and spending time doing things you enjoy play a larger role in your happiness than more money would.

For some people, money can obviously make a significant difference in their lives. For most people, though, the more intangible wealth that comes from people and experiences will hold the true key to greater happiness. Whichever your situation, you can use Lending Club to increase your happiness by making P2P loans to others.