Money does contribute to happiness, but...

"If I only had more money...."

It's a common wish. People often feel that the answer to personal and financial problems is having more money. (I include myself in this category, mostly when I'm checking out the prices of single family homes in my area these days.)

But is it true? Would our problems be solved--would we be happier--with more money? Well, yes...and no. Studies show that money does, in fact, contribute to happiness. But I believe being happy takes being money-wise as well.

The wealthy still have bad days
The Wall Street Journal recently explored the money/happiness connection in a couple articles. Columnist Jonathan Clements concluded that money alone can't buy happiness, while "happiness blogger" Gretchen Rubin wrote that "money, spent wisely, can contribute greatly" to being a happier person.

Clements and Rubin used some academic research as the basis for their conclusions. One study found that people with relatively high incomes were twice as likely to say they were "very happy" with their life situations as those with fairly low incomes. No shock there. It's hard to feel happy if you are struggling to pay the rent and put food on the table.

Another study, however, showed that wealth didn't translate into prolonged states of euphoria. People with lots of money were just as susceptible to being in a bad mood or feeling sad during the day as people who have less wealth. A boatload of money, evidently, doesn't insulate you from getting frustrated at a traffic jam or angry with your spouse or kids.

It's not just having money...
But money can contribute to happiness overall, both authors noted. Having money removes the worry of not having money, Rubin said. It also allows us to afford trips to the doctor and hire a housekeeper, thus keeping us healthier and buying us time. If we spend our money on experiences rather than just things--a good vacation with friends or family, rather than a shiny new car, for instance--we are more likely to get more enjoyment out of life, Clements pointed out.

Clements and Rubin are both right, in my view. However, they don't mention an important point: No matter how much money you have, you won't be happy unless you know how to steward it well.

...it's how you manage it
In the financial counseling ministry I serve in, we have "red" cases and "green" cases. "Red" cases are people in dire financial straits, who have little income and can't pay their bills. "Green" cases are those who have plenty of income...but through poor management and financial decisions, still can't pay their bills.

"Green" clients are no happier than "red" clients when they come for counseling. They aren't free from financial worries or much enjoying the life and resources they've been blessed with.

Neither are big-money lottery winners. There has been more than one story of lottery winners who have ended up in divorce, in rehabilitation centers, or bankruptcy court after being showered with more money than they ever imagined having.

That's why it's so important to learn, and apply, basic principles of financial wisdom. Without them, chances are you won't find much happiness, no matter how much money you have.

So strive to avoid or pay off debt. Take steps to save regularly. And make a commitment to give generously. Chances are, you'll be happy that you did.