Economists have spent years trying to determine how much money an individual needs in order to live a joyful life. Many may find a new estimate a little disheartening.
According to Newsweek, back in 2010 researchers from Princeton University determined that a U.S. household’s annual income of $75,000 ($95,000 CAD) was enough to keep people satisfied. They noted that low income adversely affects well-being and heightens “the emotional pain associated with such misfortunes as divorce, ill health, and being alone.”
A team from Purdue University looked at the subject from a global viewpoint and agreed that emotional happiness can be achieved worldwide with $75,000 a year. However, for an individual to be satisfied with their life, they would need to make $95,000 ($120,000 CAD). People with children would need even more money.
To put that in perspective, the typical Canadian employees earned just over $51,000 a year in 2017.
Emotional happiness is explained as one’s day-to-day feelings, while life satisfaction relates to one’s personal goals and how he or she compares to others. For example, having wealthy friends could make one feel less satisfied.
Many people would agree that having money at the very least curtails some sources of unhappiness. But according to Purdue University psychologist and study co-author Andrew Jebb, the figure does not match what society suggests we need to be happy.
“What we see on TV and what advertisers tell us we need would indicate that there is no ceiling when it comes to how much money is needed for happiness,” Jebb said in a statement. “But we now see there are some thresholds.”
Determining a global figure for happiness is challenging because the cost of living and economic strength vary across the world. Researchers also found that people have contrasting requirements for happiness.
“There was substantial variation across world regions, with satiation occurring later in wealthier regions for life satisfaction,” Jebb said. “This could be because evaluations tend to be more influenced by the standards by which individuals compare themselves to other people.”
There is another way to be happy if you can’t earn $95,000 a year. Newsweek pointed to a 2010 study published in the Journal of Personality and Social Psychology that found independence makes people happier than money.
In other words, having more control over your day-to-day life will make you feel more content than being a slave to your work in order to earn a five-figure salary.