How Much Money do You Need to be Happy
Does money really make you happy? While you might be enthralled to get a $20,000 pay increase, the money wouldn't make your problems disappear. And while money can bring some happiness, you don't need to be a millionaire to be content. How much money do you need to be happy? That answer isn't as obvious as you might think.
Money Isn't the Key to Happiness
Higher pay isn't necessarily guaranteed to bring you happiness. In fact, one study done by Gallup revealed that higher pay isn't connected to happiness. People who receive low pay are sometimes happier than those who have a large paycheck.
More Money solves some problems and can give you a better quality of life. However, there's a threshold. At a certain point, a higher salary won't bring you much more happiness. As your income goes up past a specific point, your happiness will decrease. Let's assume you make $30,000. With a $10,000 raise, you can find more happiness. The same is true for a $20,000 and $30,000 pay increase. But after that, more money won't make you happier.
Usually, the connection between happiness and money stops at an annual income of $60,000. You will probably have some happiness from a pay increase after $60,000, but your level of happiness won't be as great as it was with previous pay increases.
Why Money Doesn't Equal Happiness
If you're wondering why money doesn't bring as much happiness after a certain point, there are a few things you should know. First, everything has a plateau. As you get closer to approaching your ideal salary, your happiness levels off. Someone who is struggling to make ends meet will find more pleasure in a pay increase than someone who can pay their bills easily.
Second, your happiness depends on a variety of factors. You can use the money to buy some of those factors, but not all of them. Here are some of your needs:
Physiologic: Basic needs like shelter and food
Basic: Protection from dangers
Love and Belonging: Intimacy on the emotional and physical levels
Esteem: Confidence and acknowledgment of success
Self-actualization: Fulfilling your needs
How Much Money Do You Need to Be Happy?
Now, you’re probably wondering how much money would leave you the most satisfied. That number is different for everyone, but you can look at the results of a Purdue research project to get an idea of what your magic number is. In one study, people who earned $95,000 a year or more were the happiest.
That number is an ideal income for someone to meet all of their needs. With $95,000, shelter, protection, and fulfillment aren’t problems. You can meet all of your needs and still have a healthy and happy life. In fact, $95,000 isn’t only the magic number in the United States. It’s the ideal salary for happiness in the UK, Canada, Japan, and Singapore.
On a global scale, people who make between $60,000 and $75,000 are the happiest. In countries that have low costs of living, the ideal salary could be much lower.
What Factors Impact Your Happiness
Although the average person is more than happy with a salary of $95,000, you might need more or less money to be satisfied. This is because there are things in life that you can’t buy. For some people, more money means more problems. They pursue pleasure after pleasure and rack up debt as they enjoy themselves. If you continue to grow your debt and increase your spending, you’ll always have financial stress.
There’s also the stress factor. If you find a job that pays $120,000 but is high-stress, you should reconsider taking that offer. Unless you thrive and enjoy the stress, you may be better off taking a job that pays $90,000 but is significantly less stressful. You need to consider your own mental health and your goals. If you love spending weekends with your family, you shouldn’t take a higher-paying job if it means you lose your weekends.
There’s also the fact that your happiness is also dependent on the people around you. Once again, this can tie into the type of job that you have. Some well-paying jobs require you to give up most or all of your free time. As a result, you could lose your friends or family members. You can sacrifice a little for your job, but you shouldn’t completely sacrifice your happiness.
Do You Need a Higher Paying Job?
After reading this, you might realize that money isn’t the only key to your happiness. However, it is a crucial part of the formula for happiness and success. If you’re ready to start earning more money, there are a few things you can do.
First, make sure you’re earning what you deserve. Look into the average salary for someone in your area and your position. Are you earning above or below the average salary? Be sure to keep your salary search local because your region could directly impact the salary. You should also make sure the salaries you’re using to compare are of people with similar experience and credentials as yourself.
If you make less than the average salary, it’s time to talk to your employer. You could schedule a meeting with your manager to discuss a raise, and you can use the salary data you collected to negotiate better pay. If your employer won’t pay you fairly, start looking for a new job with a different company.
Looking for a New Career
You could be in a low-paying career. If this is the case, it might be the right time to swap careers. Before you make a decision, take the time to research your options. Pick a career that will give you pleasure as well as a pay increase. If you had a dream job that you never pursued, now could be the perfect time to start. In the end, you could increase your happiness and your bank account.