A new study has disputed the saying “money can’t buy happiness”. In fact, the research suggests the opposite is true, money can buy happiness, but it isn’t as simple as accumulating as much wealth as possible.

According to the Guardian, a study from the University of Pennsylvania found a strong association between money and happiness. The researchers tracked the happiness of more than 33,000 adults in the US with a household income of at least $10,000 (£7,677) a year, including those with a net worth of more than $3 million (£2.3 million).

If you believe the old saying, you might expect happiness to be fairly consistent across all participants, regardless of their wealth. Yet, the data showed there was a happiness gap between wealthy and middle-income participants, which was wider than middle- and low-income households.

Researcher Matt Killingsworth said that wealthy individuals were “substantially and significantly happier”. Yet, he added that this happiness is “psychologically deeper than simply buying more stuff”.

For many of those reporting higher levels of happiness, financial freedom played a role in their life satisfaction.

The feeling of control can explain 75% of the association between money and happiness

There are wellbeing benefits to accumulating more wealth. You might feel a greater sense of security knowing that you have assets to fall back on if you face an unexpected shock. Or you may experience a sense of accomplishment when you see the value of your savings rise.

Yet, the study suggested that it’s the ability to live life on your terms that contributes to happiness, rather than simply having more money to spend.

Speaking to the Guardian, Killingsworth said: “A greater feeling of control over life can explain about 75% of the association between money and happiness. So, I think a big part of what’s happening is that, when people have more money, they have more control over their lives. More freedom to live the life they want.”

Killingsworth added: “Money alone – which we’re already pretty motivated to pursue – is just one small part of the overall equation for happiness.”

So, while you might consider how to grow your wealth, thinking about your purpose and how to use assets to live the life you want is just as important.

That might seem like a simple task, but it’s something many people overlook.

Indeed, a report from Aegon suggests just 1 in 5 people are very aware of the day-to-day experiences that give them joy and purpose in life. In addition, only a quarter of people have a concrete vision of the things and experiences their future self might want.

This lack of understanding of what offers your life purpose could mean you’re missing out on opportunities to use what you have in ways that support your long-term happiness.

As a result, considering your priorities could provide a good starting point for creating a plan that focuses on your happiness. What would you do if money were no object?

Perhaps you’d like to retire and travel the world, or maybe spending more time with your family would be your priority.

Feeling in control of your finances and your future could boost your happiness and provide you with a greater sense of wellbeing. Chatting to a financial coach can help you to establish a much clearer view of your goals and how your finances might support those goals. Drop me a line if you’d like to find out more