Can Money Buy Happiness?
For a majority of Americans, the answer is yes — but it doesn't come cheap.
About 6 in 10 Americans believe money can buy happiness, according to a recent poll. However, to achieve happiness through financial means, most people say they would need a significant raise and a substantial amount of money in the bank.
While the median household income in the U.S. stands at around $74,000 annually, respondents in the poll stated that they would need to earn approximately $284,000 per year to achieve happiness.
When it comes to wealth, Americans indicated that they would need even more in the bank to feel content. The poll found that the desired amount is $1.2 million. Although many individuals have seen an increase in their wealth due to the rise in real estate and stock market values, the median net worth of U.S. households was $192,900 in 2022, as reported by the Federal Reserve.
The findings come at a time when Americans are feeling more stressed by money, partly due to the impact of inflation, which has been elevated for more than a year. Workers, meanwhile, aren't likely to receive the type of raises next year that could put them anywhere near the $284,000 mark, given that the average raise will be about 3.9% in 2024, according to consulting firm Mercer.
Most generations said they believed earning a low six-figure income would bring them happiness, with the notable exception of millennials, who said they would need to earn more than half a million a year to feel joy.
Millennials may have higher financial aspirations because they've experienced significant headwinds in their adult lives, including the Great Recession, when many were entering the workforce, as well as struggles to get a foothold in the housing market amid high mortgage rates and housing costs, Empower said.
About 7 in 10 Americans said that having more money would solve most of their problems, according to the study, which was conducted by The Harris Poll. The group surveyed more than 2,000 American adults between August 7 to August 14, 2023.
Can money buy happiness?
The findings add to research about the intersection of finance and happiness — and may add ammunition to the debate over whether money can buy contentment.
Earlier this year, Nobel Prize-winning economist Daniel Kahneman and fellow researchers dug into the question after earlier academic research had concluded that money could only boost happiness up to a certain point, at about $75,000 in annual income.
Money and Happiness Study
A recent study conducted by Princeton University's Kahneman has found that money can deliver a continual return on investment. The study suggests that individuals can experience increased happiness from money up to a certain earnings threshold of $500,000 per year. Beyond this figure, the researchers concluded that money has little impact on happiness.
The study also revealed that for many Americans, happiness is not solely tied to achieving a specific net worth. According to research conducted by Empower, 67% of respondents stated that being able to pay their bills on time would increase their happiness. Additionally, more than half of the participants in the survey indicated that having no debt and being able to afford luxurious items without worry would boost their moods. Furthermore, 45% of the respondents believed that owning a home would make them happier.
