It is often socially taboo to talk about money and this can lead to a sense of isolation and shame for those who are in financial difficulty. Many people would love to talk with friends and family about personal finances to get guidance or assistance from those they trust. However, this might seem socially unacceptable. Sayings such as, “Money can’t buy you happiness” make it difficult for people to have an honest conversation about money. We need to create an environment where people feel more comfortable to talk about money so that financial problems can be solved more quickly, and people can learn about personal finances more easily.

Some more money can make you more happy

While it is true that very wealthy people are not happier than those who are financially comfortable, it is also true that financial troubles are one of the greatest sources of stress. There is a definite increase in happiness for people who can improve their standard of living from poverty to middle income. Studies have shown that there is a big jump in happiness for people who earn very little as they start to earn more money. In fact, happiness rises for those who have an income increasing from R0 to R1.25m per year. Once you earn more than R1.25m per year, there is no real increase in happiness as your income rises further. It makes sense that people will be happier once they know that they can feed their families, put a roof over their heads and ensure some stability in their lives.

However, most people start to incur debt as their income rises and this can be a source of new stress that can be suffocating. That means we need to learn new skills to avoid new problems as we earn more money. Controlling debt should be a huge focus for those who want to improve their lives as their income rises.

If we spend correctly, we can make ourselves happier

Conspicuous consumption is a real problem in our country. There is a perception that we need to show our financial success through spending on branded clothes, expensive cars, flashy accessories and extravagant parties. We feel pressure to show that we have “arrived”. Unfortunately, this form of spending makes us unhappy. Buying material goods, especially expensive ones, can lead to a financial hangover where we regret our purchases. This problem is compounded if we incur debt for these expensive goods because the temporary joy of the purchase is replaced by a long-term monthly debt repayment.

However, it is worth spending money on experiences like music concerts, travel and holidays because this has been proven to provide lasting joy. Importantly, there is the initial happiness of anticipation, then enjoyment of the actual experience and then the new memories that can last for many years. It has also been proven that our happiness from these experiences is boosted when we share them with others.

If you are not in a position to spend money on major experiences, we also find that doing small things for your friends and colleagues will increase happiness. For example, buying coffees for your colleagues as a surprise, can have a lasting impact on your happiness.


I believe money makes us happiest if it provides us with more choices in life. Once we reach the point of financial freedom, any further increases in wealth will probably not lead to further increases in happiness. If your goal is simply to be wealthy, you are likely to be disappointed once you achieve your goal. Rather aim for freedom and the ability to help others, you might find some lasting happiness!

Warren Ingram CFP®, is the co-founder of Galileo Capital.