“Money can buy you lots of things but money can’t buy you love” are lyrics from a famous song. While true, money can buy you happiness – to a certain extent.

For decades research has been trying to figure out if money is linked to happiness. In 2010, psychologist Daniel Kahneman and economist Angus Deaton (Princeton University) linked money to happiness, but this happiness plateaued after a certain amount.

A few years later, more research seemed to show that more money does give more happiness. The link is exponential, so that a lot more money is needed to achieve the same boost in happiness – an order of magnitude more, or a ton more money.

A more effective way to gain happiness is to actually give more of your money away. The biggest happiness boost is when philanthropy couples altruism with connection building. Taking someone out for a coffee makes people a lot happier than giving them a gift card.

It’s not how much money you have but how you spend it that matters. The basic rule is to spend on others rather than always on yourself.

Research that came out this year from Purdue University has shown that “the ideal income point is $95,000 for life evaluation and $60,000 to $75,000 for emotional well-being”, according to lead author Andrew Jebb. This value varies from country to country and research still needs to be performed locally to figure out the optimum income for Maltese citizens. I wonder if that can be in the next electoral manifesto.