But not too much!
They say money can’t buy happiness, but let’s be honest, they say a lot of things – and they’re not always right.
When it comes to income, scientists say there actually is an ideal yearly amount we can earn to feel emotionally content and satisfied – and believe it or not, if you have too much money, you may actually start creeping back into unhappy territory.
“That might be surprising as what we see on TV and what advertisers tell us we need would indicate that there is no ceiling when it comes to how much money is needed for happiness, but we now see there are some thresholds,” explains psychologist Andrew T. Jebb from Purdue University.
Jebb and his team analysed data from the Gallup World Poll, an international survey of more than 1.7 million individuals from 164 countries.
When they examined participants’ responses on questions relating to life satisfaction and well-being – measures of what’s called subjective well-being (SWB) – they discovered the magic number for ‘income satiation’ is a global phenomenon, but one that varies considerably around the world.
Nonetheless, when you average the results out, we now have a rough idea of just how much $ = 🙂 in US dollars.
“We found that the ideal income point is $95,000 for life evaluation [overall life satisfaction] and $60,000 to $75,000 for emotional well-being [day-to-day happiness],” Jebb says.
“Again, this amount is for individuals and would likely be higher for families.”
Of course, the global average masks how satiation points are significantly higher in some countries than in others, broadly associated with how wealthy each nation is comparatively.
Life satisfaction costs $125,000 in Australia, $105,000 in North America, and $100,000 in Western Europe – but only $70,000 in Southeast Asia, $45,000 in Eastern Europe, and $35,000 in Latin America.
Globally, it’s cheaper for men to be satisfied with their lives ($90,000) than women ($100,000), and for people of low ($70,000) or moderate education ($85,000) than people with higher education ($115,000).
Perhaps the most remarkable thing about the study is how it highlights that once you’ve hit income satiation, you may want to freeze your earning capacity right there.
“Another important phenomenon within our data was the presence of turning points at which income levels after satiation saw consistent decrements in happiness,” the authors explain.
“It has been speculated for some time that very high incomes may lead to reductions in SWB.”
The authors detected this phenomenon in their own results, but noted it was only evident in terms of life evaluation (not emotional well-being), and limited to just five of the nine regions considered in the study: Western Europe/Scandinavia, Eastern Europe/the Balkans, East Asia, Latin America/the Caribbean, and Northern America.
As for why the pattern isn’t found elsewhere, we don’t know for sure, but the researchers speculate it’s associated with the demands that come with higher wages.
“Theoretically, it is presumably not the higher incomes themselves that drive reductions in SWB, but the costs associated with them,” the researchers write.
“High incomes are usually accompanied by high demands (time, workload, responsibility, and so on) that might also limit opportunities for positive experiences (for example, leisure activities).”
If that’s the case, it gels with a lot of other research that’s shown money buys happiness but only if you have free time to enjoy it, by spending it on the right things, and not prioritising money over time.
Source: Nature Human Behaviour.