Compensation & Benefits

How much does it cost to be happy?

Living expenses can be tough to manage, with inflation and low income continuing to plague the majority of the workforce, opportunities are still generally hard to come by especially for minorities who don’t get much privilege in the workplace.

Many people actually believe that money can really buy happiness, which begs the question– how much does it truly cost to be happy? Experts reveal how much money an individual should have in their bank account in order to become happy and stable.

Researchers have determined how the higher amount of money a person has can correspond with their overall well being and life satisfaction. Their measure for happiness comes from people feeling better on a day to day basis due to their security and stability.

The relationship between happiness and income

Having money provides stability as it secures food, shelter, and comfort for an individual, though having a lot of money doesn’t necessarily guarantee a person their own individual happiness, it can grant them flexibility and freedom. 

However, there are other factors that affect the happiness of an individual. Factors like close relationships with family, friends, and peers can affect the day-to-day emotions and experiences of an individual. Happiness can also be defined differently by each individual.

Each person’s ability to create security for themselves can impact their overall wellbeing from a day to day basis. Jon Jachimowicz, a business professor from Harvard, said that the primary role of money is to serve as a safeguard when negative things occur in your life.

For example, a person who’s lost their job can have a cushion to fall back into when they have a pretty secure life-savings account, or if they come from a particular well-off family. More often than not, this person will not be suffering as much compared to people who don’t have a lot of money.

How much does it cost to be happy

A study in 2018 done by authors from Purdue University found that money only buys happiness for a certain degree, meaning it could only be temporary and for a moment. The study states that the ideal income for each person globally should be about $95,000 for life satisfaction, overall measuring each individual’s day-to-day emotions. 

While the ideal income for a stable emotional wellbeing was stated to be around $60,000 to $75,000 for the average person, though the average income globally is still below a thousand dollars.

Another study conducted by Matthew Killingsworth in 2021 has suggested that an individual’s overall well being increases as their income rises, which means that a person who has more money has higher chances to achieve individual happiness and security.

Meaning that as a person’s income rises, their ability to be happy also increases. Killingsworth’s study concludes that there’s no threshold for the amount of money a person can have that limits their ability to become happy.

Having a lot of money does not really guarantee happiness, though it does give you a lot of benefits and privileges to have in life. Money itself may not directly buy happiness, but it sure can give you the leeway for it.

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