Study suggests money can buy happiness

They say 'money can't buy happiness', but it looks like the age-old saying might have just been proven wrong.

A new Cambridge University-led study confirms that there does appear to be a link between money and happiness.

However, the researchers found that 'matching spending with personality was more important for individuals' happiness than the effect of individuals' total income or their total spending.'

The team reviewed nearly 77,000 financial transactions made during a 6-month period by 625 people in the UK.

They grouped these purchases into 59 broad categories, then compared them to the participants' personalities, which were assessed according to five traits: openness to experience, conscientiousness, extraversion, agreeableness, and neuroticism.

The researchers found that happier people tended to spend more on activities that lined up with their personalities; for example, extroverts had more expenses related to eating out.

As such, one of the paper's authors Joe Gladstone has said the study shows 'that spending can increase our happiness when it is spent on goods and services that fit our personalities and so meet our psychological needs.'

The team believes these findings could help online retailers become more effective in reaching customers.

Joe Gladstone, one of the study's authors, said: "Historically, studies had found a weak relationship between money and overall wellbeing."

"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."

You can find out more about the study and its finding on the Cambridge University website here.