"There are some people so poor, all they have is money."
I just graduated from college and decide to move to "the big city." I don't have a job lined up, though. I tell myself that not having a job will be the fire behind me that I need to find one. It takes a while, but I eventually get a job. They don't pay me well at first, so I live paycheck to paycheck.
A year later I'm sitting in my review meeting and I learn that I'm getting a 20% raise! Jackpot! I can spend more money now!
Another year later I'm getting another review, and I learn I'm getting a 28% raise! I'm rich (at least I think I am)!
After a couple years of spending money on things and stuff, like I think I'm supposed to, I change directions and am finally able to stop living paycheck-to-paycheck. I finally get out of debt. I am able to build emergency savings. This comes with less stress and more peace of mind.
Later I take a trip to Alaska, and I had a great time. This is the first time I had a clue that the way I spend my money matters; that going to Alaska for a week gives me more enjoyment than buying a new computer desk or car stereo.
Money Can Buy Happiness
More money can buy happiness up to a certain point, which is about $75,000 per year. This number depends on where you live, of course, but the idea is that if you make less than this you are at greater risk of not having your basic needs met. If you're basic needs aren't being met, then making more money will give you more happiness simply because your stress levels are down.
If you are below the magic number, then yes, more income will make you happy up to the magic number.