Figuring out how to clear this hurdle has implications for our daily budget decisions and our investments, and for how organizations from resorts to charities do business. Money is inseparable from our existence in society - we work for money, live on money, and hoard it and spend it for a tangled mix of reasons. As psychologists unpack these insights, their work offers a powerful new way to think about this complex and poorly understood relationship. And it gives us a chance to use our spending money, however much it may be, as a vehicle to a more fulfilling life rather than just a better accessorized one.

Any attempt to put these findings into practice, however, has to contend with the subtle but powerful ways money itself channels our thinking, and the ways it plays on human attitudes about sharing and scarcity. Recent studies have suggested that merely thinking about money makes us more solitary and selfish, and steers us away from the spending that promises to make us happiest.

Dunn and others are beginning to offer an intriguing explanation for the poor wealth-to-happiness exchange rate: The problem isn’t money, it’s us. For deep-seated psychological reasons, when it comes to spending money, we tend to value goods over experiences, ourselves over others, things over people. When it comes to happiness, none of these decisions are right: The spending that make us happy, it turns out, is often spending where the money vanishes and leaves something ineffable in its place.

But starting to emerge now is a different answer to that age-old question. A few researchers are looking again at whether happiness can be bought, and they are discovering that quite possibly it can - it’s just that some strategies are a lot better than others. Taking a friend to lunch, it turns out, makes us happier than buying a new outfit. Splurging on a vacation makes us happy in a way that splurging on a car may not.

Modern research generally backs them up. Psychologists and economists have found that while money does matter to your sense of happiness, it doesn’t matter that much. Beyond the point at which people have enough to comfortably feed, clothe, and house themselves, having more money - even a lot more money - makes them only a little bit happier. So there’s quantitative proof for the preachings of St. Francis and the wisdom of the Buddha. Bad news for hard-charging bankers; good news for struggling musicians.

Can money buy happiness? Since the invention of money, or nearly enough, people have been telling one another that it can’t. Philosophers and gurus, holy books and self-help manuals have all warned of the futility of equating material gain with true well-being.

Despite millennia of folk wisdom on the topic, it wasn’t until a decade ago that researchers started to take a hard look at whether money really does have anything to do with happiness. In the late 1990s, a psychologist named Martin Seligman founded the field of positive psychology, driven by the idea that psychologists had as much of a duty to figure out what made people happy as to study their problems. At the same time, a few economists were starting to borrow the tools of psychology to challenge some of the assumptions that their field had long held about human behavior - that people were rational calculators of cost and benefit, for example, and that looking at how people spent money could be a reliable indicator of their deeper desires.

Positive psychologists and so-called behavioral economists both turned their attention to the money-happiness nexus. Mapping financial statistics against people’s self-reported happiness, the researchers sifted data from rich nations and poor nations, from people up and down the economic ladder, and from individuals as their economic fortunes improved or deteriorated. The connection between wealth and happiness, they found, was pretty weak.

“It’s not a zero correlation, even at higher income levels, but it’s not a very big correlation,” says Sonja Lyubomirsky, a psychology professor at the University of California at Riverside and a leading happiness researcher. Money, she says, “matters less than we think it would.”

But what if that wasn’t the whole story? Dunn, of the University of British Columbia, remembers wondering a couple years ago whether money and happiness were necessarily so disconnected. Partly, she was inspired by a change in her own circumstances: She had just gotten hired as an assistant professor, her salary suddenly jumping from a post-doctoral researcher’s $20,000 stipend to about four times that much. She found it hard to believe that there was nothing she could do with some of that new money to make herself happier.

What if, for example, she spent it not on a new flat-screen television or sectional sofa, but on other people? One of the most consistent findings of the happiness literature is that having a strong social network is an excellent predictor of happiness, and it seemed plausible that you could use money to buy happiness that way. She teamed up with Michael Norton, a psychologist and assistant professor at Harvard Business School, and the two embarked on a series of experiments to test whether spending money on others actually makes us happier than spending it on ourselves.