How much money do you really need to be happy?
It’s hotly debated: can money buy happiness? Most people say no, yet as a society we pursue money like it can.
The truth? To a point, money can indeed buy happiness. Research has shown that until an individual reaches a certain point, about $75,000 a year in the United States, money does buy happiness. But after that point, an individual’s happiness doesn’t improve as they earn more money, according to Princeton University researchers.
This is an iteration of the Easterlin paradox, a discovery in 1974 by Richard A. Easterlin which shows the rich are generally happier than the poor, though neither GDP growth nor higher GDP per capita increase happiness once development satisfies basic needs [via HappyCounts.org]. This suggests that once basic needs are met—and basic may indeed go beyond food, water, shelter—money can’t buy happiness.
However, if money can buy people access to things they enjoy—leisure time, travel, sports, or fashion—it can buy happiness. But the catch is that these things often ignore the discrepancy between evaluating and experiencing happiness.
There’s a transformation of people’s perceptions and feelings as society evolves. As freedom of choice and material wealth spread, happiness is affected by heightened expectations. Affluence may cause individuals to judge their lives as comparatively better, but the individual may feel increasingly dissatisfied.
Psychologist and Nobel prize winner Daniel Kahneman breaks the idea of subjective well-being and happiness into two components: the emotional well-being shaped by everyday experiences, and a person’s cumulative life evaluation. Kahneman disagrees, and finds that higher income improves a person’s life evaluation even among people who are already wealthy. “More money does not necessarily buy more happiness,” he told US News, “But less money is associated with emotional pain.”
This research suggests that even if you haven’t hit the $75,000 threshold, you can improve your happiness through a few tweaks in thinking:
- Keep expectations reasonable even as your income goes up
- Appreciate your everyday experiences despite their cost
- Evaluate your cumulative life experiences from a positive standpoint
These three tips will help dispel the notion that money can buy YOU happiness and help you find happiness right now, regardless of your income.
For a sampling of some of the most ridiculous things money can buy, check out our Pinterest board!