Happiness depends on multiple factors, including personal values and needs.
Income levels can positively or negatively impact both happiness and stress.
Gratitude for other areas of life can create feelings of happiness regardless of a person's financial situation.
They say money can't buy you happiness. And most people strive to live and create a happy life for themselves. But is it possible that money could help you do that? Let's take a look at how money can affect happiness and what really defines happiness.
The definition of true happiness varies from person to person. "While a person's happiness often depends on their safety and well-being—on their salary—it also depends on their values," licensed mental health therapist Billy Roberts told Health.
Of course, people are driven by different values. For some, value lies in power; others find value in security or self-care. "A person who is driven by power might have different financial needs than someone who is driven by security," explained Roberts. These factors can affect a person's happiness or perception of happiness, altering the amount of money they truly need to feel satisfied emotionally.
"At the end of the day, the salary should support a value-driven lifestyle," said Roberts, "so the number is less important than that number allowing a person to drive in their 'values lane,' so to speak."
A 2021 Proceedings of the National Academy of Sciences(PNAS) article looked at the complicated and complex relationship between money and well-being. The data suggested that happiness actually increases the higher a person's income rises. Meaning that the more money we make, the happier we become (or rather, we have the means to buy the things or experiences that in turn make us happy).
The article surveyed more than 33,000 employed U.S. adults and more than 1.7 million sampling reports and discovered a direct connection between higher incomes, feeling better day-to-day, and being more satisfied with life overall.
On the flip side, people with low income may be experiencing more stress. Licensed clinical psychologist and psychology professor Margaret Sala, PhD, who practices in Connecticut, told Health that poverty can amplify the experience of misfortunes and stressors. In other words, people with lower income levels may increase perceptions of unhappiness or other negative emotions.
Illness can also be a factor that affects happiness. "Illness can be much worse for those who are poor and unable to seek medical care," said Dr. Sala. Another example from Dr. Sala: not getting help with difficult tasks—such as childcare or house cleaning—that those with more comfortable lifestyles often don't need to worry about.
Does Stress Affect Happiness?
But, Dr. Sala argued that some individuals with higher salaries may not be able to enjoy small pleasures in life due to stressful and time-demanding jobs.
A survey in 2018 from LinkedIn found that U.S. employees making more money experienced significantly higher levels of stress—up to 68% more for top earners taking in over $200,000. While these higher incomes buy pleasures such as nice vacations and meals at restaurants, Dr. Sala noted that stress can play a key factor in one's overall happiness.
Are These Mental Health Mantras Tanking Your Bank Account?
The connection between money and happiness isn't just a feeling or perception: There's a science behind the phenomenon.
"From a neuroscience perspective, scarcity of money and resources signals to our brain that there is a threat to our survival," Renetta Weaver, doctor of metaphysics and licensed clinical social worker, told Health.
In fact, poverty can influence a person's cognitive function, altering the way they think and reducing performance in verbal memory and processing speed, according to a 2013 article published in Science.
Can You Be Happy Without Money?
In the event that money can't actually buy happiness, how can people be happy with what they have, regardless of income level? "If we don't equate money and things to our worth and value, we find happiness in the things that money can't buy," said Weaver, "such as quality time and experiences with oneself and others."
Milana Perepyolkina, an international bestselling author of two books about happiness, added that people confuse pleasure with happiness, meaning correlations between salary and emotional well-being may not be accurate. "If you eat a piece of cake, you experience pleasure," Perepyolkina told Health. "As soon as you are done, the pleasure is gone. When you spend money, you experience pleasure. Several hours later, this pleasure is also gone."
Perepyolkina noted that even in certain people "who live in very poor conditions, such as makeshift plastic tents with all of their possessions fitting in one bag, you will notice joyful, bright smiles. How can someone who has almost nothing be so happy? This is because they are grateful for what they have: their life, their family, and their community."
Just how much money do we need to earn to be happy nowadays? The answer is a bit more than the often cited $75,000 per year. In a 2023 paper published by the Proceedings of the National Academy of Sciences (PNAS) journal, key findings suggest that earnings up to $500,000 boost and buy overall happiness.
A new study from a group of scientists found that the limit in terms of whether money can buy happiness starts to max out once someone hits $500,000 a year. It's a far cry from past research, in which one study established the idea that happiness plateaus after $75,000.
Their new findings suggest that, for most people, happiness does improve with higher earnings, up to $500,000 a year — although participants above that income were "quite rare," providing a lack of comprehensive data for that group, the study notes.
For 80% of people, happiness continues to rise with income past $75,000. But for an unhappy minority, those individuals' unhappiness diminishes as they make more money — but only up to about $100,000 (about the same as $75,000 adjusted for inflation).
Studies have shown that the impact of our annual income on our overall happiness isn't exponential for everyone. In fact, it plateaus around $100,000 for most people, which means a lower return on your happiness for every dollar you make beyond that point.
What do studies say about money and happiness? Purdue University found the ideal average income for people worldwide is $95,000 and $105,000 in the U.S. Beyond that, satisfaction with life deteriorates, it said.
Gen Z, Gen X and boomers indicated they only needed a somewhat modest income of $124,000 – $130,000 to be happy, far below the “average” of $284,167 for the entire survey. But millennials greatly skewed the results, requiring a whopping $525,000 per year in income to be happy.
But new data shows they may find happiness earning far less. A salary of $94,696, on average, would make Americans happy, according to a new survey of over 1,200 people from Moneyzine.com. Earning a salary smaller than six figures isn't enough for everyone, though, especially in states with higher costs of living.
Studies suggest that beyond a certain income threshold—often cited around $75,000 to $100,000 annually—the additional happiness gains from extra income begin to level off.
Key Findings. On average, an individual needs $96,500 for sustainable comfort in a major U.S. city. This includes being able to pay off debt and invest for the future.
Doing a job they love is more important than a higher salary. The phrase 'money can't buy happiness' dates back to the eighteenth century, but it seems it's still true in modern day America – at least when it comes to employment.
If you make $75,000 a year, you're earning more than half of all workers in the U.S. And in fact, many people would probably consider the salary as good pay. After all, a $75,000 salary works out to around $6,250 per month, $1,442.31 per week, or $36.06 an hour.
On average, Americans say they'd need to earn around $520,000 annually to feel rich, according to the survey. Bankrate polled 2,407 adults in the U.S. online from May 16 to May 20.
Based on that figure, an annual income of $500,000 or more would make you rich. The Economic Policy Institute uses a different baseline to determine who constitutes the top 1% and the top 5%. For 2021, you're in the top 1% if you earn $819,324 or more each year. The top 5% of income earners make $335,891 per year.
Some say that 50,000 INR per month is enough to live comfortably in India. However, others say that it depends on your lifestyle. In 2023, the average salary in India was 31,900 INR per month.
The Average American Spends $3.3 Million Over Their Lifetime: See How That Breaks Down. Believe it or not, the average American will spend millions of dollars over their lifetime — $3.3 million to be exact, according to a new study by OneMain Financial.
The study included people in 19 different countries across five continents. Unexpectedly, despite having little money, participants largely reported high levels of satisfaction with their lives. In some cases, the levels of life satisfaction among low-income communities rivaled the levels seen in wealthy communities.
How much do I need to have in savings for retirement? Fidelity Investments recommends having eight times your income by age 60 and ten times your income by age 67. The amount you need in savings to retire comfortably largely depends on your lifestyle and what age you plan to retire.
MONEY Choose one player to be the banker. This player is in charge of all money paid to and from the bank. The banker separates the money into piles by denomination, gives each player $10,000, then puts the remaining amount of each denomination into the storage bins on the left side of the banker's tray.
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:max_bytes(150000):strip_icc()/Health-Stocksy_txp807287f6H7x300_Medium_5961341-d0fbe5220d9947ecb32aeba5f71ce901.jpg "How Much Money Do You Really Need to Be Happy? (1)")
