The idea that money, generally, and the state of our finances, in particular, should be an essential contributor to our happiness seems obvious. When we handle money wisely and give it an appropriate amount of significance in our lives – not too little, not too much – it makes us happy and contributes to our fulfillment and contentment.

However, if you read much of the psychological research on the financial well-being of consumers, you would not think so. Early on, researchers used an individual’s income, spending pattern, amount of debt, net worth, or even debt-to-income ratio as objective indicators of their financial well-being. The logic was that having more money, or net worth, and lower debt is indicative of greater money happiness.