Living simply is linked to greater happiness. A review of 259 groups of people found that the more someone cares about money and possessions, the lower their well-being, and the worst effects show up in how people see themselves and in risky behavior.
Helga Dittmar and colleagues at the University of Sussex combined 753 results from studies around the world. Their review was published in the Journal of Personality and Social Psychology in 2014.
People who see possessions as a sign of success and a path to happiness showed the strongest link to lower well-being, and people who simply care about money showed a weaker one. Risky health habits, compulsive shopping, and feeling bad about yourself had the biggest links. Life satisfaction and bad moods showed smaller links that still held. Jobs and schools that reward materialistic values made the link stronger, and it also shifted with a country's economic growth and the gap between rich and poor.
Unmet basic needs were the best explanation for the pattern: feeling capable, feeling free to make your own choices, and feeling close to others. A life built around stuff may crowd those out. Most of the studies took one snapshot in time, so the direction isn't proven, and the effects were modest. Across 259 groups, the people doing best were the ones who felt capable, free, and close to other people.