A new study reveals how much money you really need to be happy - and it's less than you think
- Researchers from Purdue University found the optimal income levels for emotional-well being and life satisfaction.
- Emotional well-being for individuals peaks around $60,000 - $75,000, while life satisfaction peaks around $95,000
- Beyond that point, people actually became unhappier - likely because they compared themselves, and what they spent on, to others.
A new study reveals that money really can buy happiness - but only up to a certain point.
The research, published in the journal Nature Human Behavior, shows that being wealthier isn't necessarily better when it comes to indicators of happiness like long-term life satisfaction and emotional well-being.
In fact, the researchers found that the ideal point - though it varies in different parts of the world - is around $95,000 for life satisfaction, and between $60,000 to $75,000 for emotional well-being.
Beyond that income level, the researchers found that the old adage of 'More money, more problems' actually holds true.
"At this point they are asking themselves, 'Overall, how am I doing?' and 'How do I compare to other people?" Andrew T. Jebb, a PhD student in Psychology at Purdue University and the study's lead author, said.
"The small decline puts one's level of well-being closer to individuals who make slightly lower incomes, perhaps due to the costs that come with the highest incomes," Jebb said.
Once you pass the income threshold where purchasing the basic necessities of life, keeping up with loan payments, and having a little extra leftover is reached - starting around $60,000 after taxes for the average individual - people are generally driven by material desires and comparing themselves to others.
That reduces happiness overall, the study says. The amount is naturally higher for families that need to support more people.
To understand how income affects happiness, Jebb and his team took data from the Gallup World Poll, a representative survey of 1.7 million people in 164 countries. The researchers made estimates based on questions around life satisfaction and emotion, correlated with average salary and purchasing power.
Jebb cautions that his findings are only part of a larger equation of what makes a person happy.
"Money is only a part of what really makes us happy, and we're learning more about the limits of money," Jebb said.