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Category: Project

Description: Although income is an important predictor of life satisfaction, the precise forces that drive this relationship remain unclear. We propose that financial resources afford individuals a path to reducing the distressing impact of everyday hassles, in turn increasing life satisfaction. More specifically, we hypothesized that financial scarcity is associated with greater distress intensity in everyday life. Further, we propose that lower perceived control helps explain why financial scarcity predicts higher distress intensity and lower life satisfaction. We provide evidence for these hypotheses in a 30-day daily diary study (522 participants, 13,733 observations). A second study (N=376) supports the notion that financial scarcity reduces the likelihood that people aim to reduce the adverse impact of daily hassles with the help of financial resources (but not social resources). While money may not necessarily buy happiness, it reduces distress intensity experienced in daily life and which can thereby increase life satisfaction.