It’s official: money really does buy you happiness (but only if you spend it in the right way)

The Beatles may still be right: money can’t buy you love - but it could buy you happiness, according to new research.

But there’s a catch - what you’re actually buying is time. The study published in the official scientific journal of the National Academy of Sciences involved more than 6,200 people in the US, Canada, Denmark and the Netherlands. It asked people how much they spent on time-saving services and how this made them feel. Researchers also gave a group of 60 people in Vancouver money to buy an item on one weekend and to purchase a service that saved them time on the next weekend, and compared the effects.

The results from both parts of the study showed that rather than splashing out on material things in the pursuit of happiness, you’d be better off paying someone to clean your house, do your food shopping or carry out home repairs.

But even people who can afford to pay for labour-saving services don’t always take advantage of this route to more time and greater happiness. The survey included 818 Dutch millionaires and found that almost half did not spend money on outsourcing tasks that they don’t like doing.

“People who hire a house cleaner or pay the kid next door to mow the lawn might feel like they’re being lazy,” said one of the researchers, Professor Ashley Whillans, of Harvard Business School.

"But our results suggest that buying time has similar benefits for happiness as having more money.”

So buying back time could be a way to indirectly buy happiness. But what if how you go about spending money was the deciding factor?

If we splash the cash in a way that fits our personality type we are likely to be more satisfied with life, according to research by the University of Cambridge that looked at more than 76,800 transactions from 625 people over a six-month period. Each transaction was analysed to determine whether it fitted with one of the big five personality attributes - openness, conscientiousness, extraversion, agreeableness or neuroticism.

The study found that extroverts spent more in bars, while introverts preferred to pay out for health and fitness. The researchers conducted a second exercise to see if there was more than just a correlation between spending, personality type and happiness and discovered a causal effect. Extroverts were happier than introverts when both personality types were asked to spend money in a bar; and vice versa when both groups were asked to spend money in a book shop.

“Finding the right products to maintain and enhance one’s preferred lifestyle could turn out to be as important to well-being as finding the right job, the right neighbourhood, or even the right friends and partners,” says the research.

Indeed, previous research has suggested a salary plateau when it comes to happiness. An older Princeton study suggests an increase in well-being as a person’s salary increases, but this stops at $75,000. Above this salary level, a further increase in earnings was shown to have no additional effect on happiness.

Earning more money and spending money in line with our personality type may boost our happiness, but spending it on others could be even more effective. A Harvard Business School experiment gave a group of people $10 gift cards for Starbucks. Some were asked to spend it on themselves, some to give the card to someone else and the remainder to use it to take someone for a drink. The happiest participants? The people who got to spend money on other people and spend time with them too.