As any cash-poor person living in New York City can attest, money can buy happiness in the form of square footage and fine dining—and science is now on your side. A revolutionary study from Cambridge University uncovered the first concrete, statistical link between money and happiness, putting a stop to the seemingly endless debate regarding money's appropriate role in people's life satisfaction and happiness.
More specifically, Cambridge researchers found that money can buy happiness when it's spent according to interests and personality. "Matching spending with personality was more important to individuals' happiness than the effect of individuals' total income or their total spending," wrote Dr. David Stillwell of the report.
The study was based on almost 80,000 UK bank transactions and a standard personality and happiness questionnaire, according to the press release. The researchers then sorted the transactions into 59 categories, and the participants' personalities into five traits: Openness to experience, conscientiousness, extraversion, agreeableness, and neuroticism. After cross-referencing the two data sets, they found that happy people tend to spend more money on experiences and activities that complemented their personalities and enriched their lives. For example, extroverted people spent roughly $60 more per year on nights at the bar than introverts.
"Historically, studies had found a weak relationship between money and overall well-being," said Joe Gladstone, a research associate at Cambridge Judge Business School and an author of the study. "Our study breaks new ground by mining actual bank transaction data and demonstrating that spending can increase our happiness when it is spent on goods and services that fit our personalities and so meet our psychological needs."
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