I think it can and it doesn't at the same time.
First, please note that I’m defining money as lots of it. In this day in age the average person cannot (reasonably) get by with out money. So to make a distinction I am referring to money here as copious amounts of it. I.E. getting by on minimum wage vs. making six figures.
Money is potential, a means. You can get things you want with it, but you can get those things with out it as well. Do you need lots of money to go on a vacation? No, I have a friend right now who’s backpacking across the states. Does money help? Yes. Absolutely. Money is like cheat codes in video games. The more you have the easier it gets.
Roth states that in some recent research there are a few ways to get more happiness from your buck.
Spending money on experiences brings you more lasting happiness than spending money on Stuff. For example, a vacation will make your life better, over time, than a new couch.
It’s okay to think small. Spending on several small treats — like a massage, a good book, or dinner at your favorite restaurant — will bring you more happiness than one big-ticket item like a sports car.
Leisure activities like games, sports, hobbies, and entertainment have more happiness value than material goods.
Spending money on experiences. Until we have the technology to upload the perfect experience into your head like a memory, there is no way that money can buy an experience. Money cannot buy an experience. It can point you in the right direction though. Money can give you better chances to having good happy experiences, but ultimately the experience is up to you.
I remember going to Europe with my family a few years ago. We spent 6 weeks there (a month in England, a week in France, a week in Belgium). Back then my dad was there on business for the month and had to go to Belgium for something so my parents decided to take my brother and me with. I had great experiences the whole time, except for in Belgium. I don’t remember Belgium because I was so burnt out form the rest of the trip that I put no effort into it. Granted I was in high school, but still in England and France we did all sorts of things and I have very fond memories of it. I didn’t have a bad time in Belgium by any means; the interesting thing with experiences is that even bad ones can turn into good ones later via. telling travel horror stories to friends. But that last week is just a blank.
Spending on small treats is ok, but again you don’t need money to do that. In college, my GF and I had to budget what we were going to do because she has a very limited spending amount (a grand total of $20 a month on fun things, but sometimes that got eaten up in groceries). So we found ways around it. We hardly ever ate out; instead we set aside one day a week to cook something for each other. What we could make depended on what we had on hand most of the time. Another thing did was just go for walks.
This isn’t to say that money cannot buy happiness in the traditional sense. I recently bought a new TV, upgrading from a 20” to a 32” flat screen (I bought it on the cheap for $300). Did it make me happy? Yes, the way my apartment is set up with my 20” TV I had a hard time seeing the screen, much less read subtitles or play video games. So yes, buying the new TV made me happy, but I didn’t need to drop a grand to do it.
Roth ends his article with saying that what really makes people happy is connection, and I agree with this, but again, it doesn’t involve money. Ultimately it is our memories that make us happy. Some expenses facilitate those memories but others have no effect on them. Really what I think you need to do is hone in on what purchases facilitate those happy memories and dispose of the ones that do nothing. You can’t do this completely and utterly, I still have to pay my bills, but I don’t need to go out and buy that latte which doesn’t do anything for me (unless I’m going with my friends).