Money does buy happiness — to a certain point, according to research from Purdue University. So what’s the magic number? To feel satisfied with life, the researchers found that an individual salary of $95,000 is ideal, while $60,000 to $75,000 satisfies emotional well-being.
The researchers based their findings on data from the Gallup World Poll of more than 1.7 million individuals from 164 countries, with the estimates based on purchasing power and questions relating to life satisfaction and well-being.
Interestingly, the study concluded that incomes higher than the $95,000 threshold tended to be associated with reduced life satisfaction and a lower level of well-being. Biggie Smalls was onto something with his hit song, “Mo Money Mo Problems,” as the researchers surmise that people who earn more may be driven by material desires and engage in social comparisons.
“Money is only a part of what really makes us happy, and we’re learning more about the limits of money,” said lead author Andrew T. Jebb.
Different happiness experiences
A study out of the University of California, Irvine, adds more clarity to these findings. Analyzing a survey of a nationally representative sample of 1,519 people about household income and questions measuring emotions, researchers found that income levels actually change how people experience happiness.
Those who earned more reported a greater tendency to experience emotions that focused on themselves, such as contentment and pride around their accomplishments, status, and achievements, according to the study. Individuals who earned less were more likely to feel emotions that focus on other people and their ability to care for and connect with others, namely compassion and love, and reported experiencing more awe and beauty in the world around them.
“These findings indicate that wealth is not unequivocally associated with happiness,” said lead author Paul Piff. “What seems to be the case is that your wealth predisposes you to different kinds of happiness. … These findings suggest that lower-income individuals have devised ways to cope, to find meaning, joy, and happiness in their lives despite their relatively less favorable circumstances.”
How money should be viewed
These studies suggest money’s deleterious effect on happiness, but that’s not always the case, according to a study conducted by Binghamton University researchers. They found that people are more satisfied with life when they view their wealth and material possessions as a sign of success rather than as a sign of happiness.
“People simply say ‘money can’t buy you happiness’ and just assume that materialism has a negative influence on overall well-being,” said study co-author Jenny Jiao. “But it’s not that simple. There is a real difference between success materialism and happiness materialism.”
The finding is based on a survey of more than 7,500 German adults who asked about their satisfaction levels on life, expected satisfaction of life in the future, and economic motivations. Those who derived happiness from wealth and material possessions tended to be dissatisfied with their current standard of living and weren’t able to find satisfaction from their family, social lives, health, and other areas of life. Meanwhile, people who viewed wealth and material possessions as a sign of success were more motivated, leading to an increase in future satisfaction with their standard of living.
“Your happiness should never rely on money alone, but money can be a tool to motivate you to achieve major milestones in your life, which can make you feel happier in the long run,” Jiao said. “Never lose sight of the other things that provide happiness that don’t necessarily have monetary value. These include family, friends, your health, continual learning, and new experiences.”
So earning more money won’t necessarily make you happier, but there is something you can do with your money that will, according to University of Zurich researchers: Be generous, even if it’s only a little. Even promising to be more generous is enough to trigger a change in our brains to make us happier, they said.
It seems there’s a lot of truth to the expression, “a little generosity goes a long way.”
Generous behaviour is known to increase happiness, which could thereby motivate generosity. In this study, we use functional magnetic resonance imaging and a public pledge for future generosity to investigate the brain mechanisms that link generous behaviour with increases in happiness. Participants promised to spend money over the next 4 weeks either on others (experimental group) or on themselves (control group). Here, we report that, compared to controls, participants in the experimental group make more generous choices in an independent decision-making task and show stronger increases in self-reported happiness. Generous decisions engage the temporo-parietal junction (TPJ) in the experimental more than in the control group and differentially modulate the connectivity between TPJ and ventral striatum. Importantly, striatal activity during generous decisions is directly related to changes in happiness. These results demonstrate that top-down control of striatal activity plays a fundamental role in linking commitment-induced generosity with happiness.