How Much MONEY do You Need to be Happy? (According to Science)

How Much Money to be Happy, According to Science

Money can buy you happiness, but to what extent?

More Money = More Happiness?

According to a money vs happiness study on over 1.7 million individuals worldwide on human behavior. The researchers seek to answer this mind boggling question,

“How much money do you need to be happy?”

The results are shocking.

You can be getting a high pay, but it don’t correlates to the amount of happiness you get.

In fact, you can be working in a lower paying job but happier.

The study is based on a life-satisfaction survey conducted worldwide with over millions of people took part in the Gallup World Poll.

Respondents across the world were asked a few simple questions to rate their life-satisfaction on a scale of 0-10.

  • 0 is the “worst possible life”
  • 10 is the “best possible life.”

The researchers subsequently run through the data to analyzed the relationship between the survey score and household income.

income vs happiness graph

Income vs Happiness Graph

Income level and happiness study credited to: Happiness, income satiation and turning points around the world. Andrew T. Jebb, Louis Tay, Ed Diener & Shigehiro Oishi. Nature Human Behaviour volume 2, pages 33–38 (2018)

More Money ≠ Happiness

correlation between money happiness

People are happier when they make more money as the emotional well-being rose with income, but only up until a point where the correlation gradually become less significant and eventually the correlation (r) of income to happiness become zero.

If you are earning $10,000 today and got a pay raise to $20,000 annual income.

Increase in income does have an significant increase to your happiness and life satisfaction level.

In fact, you almost have an 1 point jump from just being ‘acceptable (5.5)’ to ‘pretty happy (6.5)’.

Same goes if you get another pay raise and increase your income from $20,000 to $40,000 annual income.

You’ll have another 0.6 point jump from just ‘pretty happy (6.5)’ to ‘happy (7.1)’.

But you’ll notice, as your earning increase higher, the level of happiness doesn’t increase just as much.

Eventually, at a certain income level, the happiness level will start to plateau, or even fall.

The findings…

8 points of the “income level and happiness study” is the highest rated points for anyone who want to achieve the maximum level of happiness by increasing their income.

Which means, ‘8’ is the highest level of happiness that money can buy.

Perfect salary for maximum happiness in The united states

People are happier when they make more money, Americans with a salary earning more than $95,000 annually are the happiest according to a study by Purdue University.

The study found that $95,000 annual income is the ideal income for life evaluation where you’ll not only have enough wealth to meet basic needs.

You’ll have a fulfilling life that meet the higher level of the Maslow’s Hierarchy of Needs.

Maslow’s Hierarchy of Needs Table

Level Maslow’ Hierarchy Description
1 Physiological Needs Basic needs: Food, water, clothing and shelter.
2 Safety Needs
Basic needs: Protection from violence and general well-being.
3 Love and Belonging Needs Physical and emotional intimacy, ranging from emotional bonds to sexual relationships.
4 Esteem Needs Self-confidence and acknowledgment from others.
5 Self-actualization Needs Fulfilment of one’s potential as a person.

The study shows, $95,000 annual income allows an individual to reach the highest level of happiness for wealthier countries like America, United Kingdom, Canada, Singapore and Japan.

But less wealthy countries earn less to reach the peak happiness.

Globally, people who are earning $60,000 to $75,000 per year shows the highest level of emotional well-being.

Why more money doesn’t make you happier?

Earning more money doesn’t make you happier because the things that bring long-term satisfaction and contentment cannot be bought.

In fact, earning more than $95,000 are associated with lower level of happiness.

Why?

Different research have come up with a few different theories of why more money doesn’t always make you happier.

The main reason why too much money is a bad thing is because,

“Money influences happiness through the fulfilment of both needs and increasing material desires.”

This is a psychological phenomenon called “hedonic adaptation”.

What is a hedonic treadmill?

A hedonic treadmill is a term used to describe the human tendency to pursue of pleasure one after another. Hedonic treadmill describes the effect of the return of your emotions to your baseline level after the surge of happiness felt after a positive turn of event.

The Hedonic Treadmill

The Hedonic Treadmill

Over time, we get used to that change in our life and our expectations changes, eventually our lifestyle changes as well.

When we reach the satiation point of $95,000 annual income per year, the desire to fulfil material desires increases exponentially. Thus, lower level of happiness.

There are also other reasons why you may want to consider a lower paying job that can make you feel happier.

Does money brings happiness?

Money does improve happiness and having a right amount of money can leave you feeling less stress and generally more satisfied with life by providing your general needs and wants.

According to the studies, the perfect salary for happiness is $75,000, which sits just around the middle of $60,000 and $95,000.

But depending on where you live in the world,

“Income of $60,000 to $95,000 will make you quite a happy individual according to science.”

Yes, money can buy happiness.

what are the happiest jobs that pay well?

Finding a job that you will like is quite tough, especially when you are trying to find one that you will find enjoyment working while making you a good living.

Here are some of the happiest jobs with good pay according to recent studies.

Happiest careers that pay well

No. Job Title Median Salary Education Requirement
1 Property manager $51,229 Associate degree
2 Plumber $51,776 None
3 Carpenter $53,862 None
4 Interior designer $57,369 Postsecondary certificates
5 Marketing consultant $59,493 Associate degree
6 Facilities manager $62,769 Associate degree
7 Executive chef $63,325 Postsecondary certificates
8 HR manager $69,221 Associate degree
9 Aircraft mechanic $69,472 Postsecondary certificates
10 Surgical technologist $69,725 Associate degree
11 Physical therapist assistant $70,904 Associate degree
12 IT consultant $75,883 Associate degree
13 Accounting manager $77,979 Associate degree
14 Dental hygienist $78,974 Associate degree
15 Real estate agent $90,687 Postsecondary certificates
16 .NET developer $95,312 Associate degree
17 Finance manager $97,916 Associate degree
18 Network engineer $98,068 Associate degree
19 Software engineer $108,981 Associate degree
20 Chief technology officer $144,682 Associate degree
21 Loan officer $176,466 Associate degree

Question

Does the study surprise you?

Are you going to find a higher paying job? Or even a lower paying job so you can be happy?

Let us know in the comments below!

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