Most people believe that if they only had more money, they would be far happier. Past research has shown the magic salary for happiness to be $75,000, but given inflation and the rising cost of living, that number certainly seems low. Would $100,000 a year bring more happiness? What about $500,000?
Well, according to a recent study, the actual number doesn’t really matter, at least not as much as your sentiment surrounding it does.
A new study found that he way you feel about how much money you make may contribute more to your happiness than the actual number
Researchers found that subjective feelings about money and income levels influence our well-being in several ways. Results from the study published in the Journal of Personality and Social Psychology found that people who feel satisfied with their finances, regardless of how much they earn, tend to report better mental, physical, and emotional well-being in the present.
The study was conducted by Vincent Y. S. Oh, a senior lecturer at the Singapore University of Social Sciences. Oh wanted to better understand how money, both in terms of how much a person earns and how they feel about their overall finances, relates to their emotional, physical, and mental state.
People who felt good about their finances were healthier and less depressed.
Oh analyzed participants over multiple years, with different measures taken at various points to assess income, financial satisfaction, and 22 indicators of well-being. These included emotional states, physical and mental health, life satisfaction, social relationships, and a sense of purpose. He found that people who felt good about their finances were more likely to be satisfied with life, healthier, less depressed, and more positive in general.
In other words, two people with the exact same salary can feel varying levels of happiness based on how satisfied they are with their finances. For example, someone who grew up in a wealthy household may not feel satisfied with a $100,000 salary, leading to lower levels of happiness. However, another person who recently got a raise and is now making $100,000 will likely feel more satisfied and, in turn, happier, even though they both of the same salary.
Financial satisfaction did not predict long-term improvement in well-being, however.
While financial satisfaction was strongly tied to how people felt in the moment, it did not seem to help people get better or stay well in the future. People with higher income at the start were more likely to experience improvements — or smaller declines — in things like emotional health and life satisfaction over time.
“The main takeaway is that there isn’t a single answer to the question of whether money buys happiness or whether one should be content with what one has,” Oh told PsyPost. “Money does matter in that higher-income earners were more likely to have better future well-being, but at the same time, being subjectively happy with one’s finances played a much larger explanatory role in current well-being than how much one earns.”
Many workers feel that they aren’t paid enough at work.
In a survey conducted by the Pew Research Center, only 30% of respondents reported feeling high levels of pay satisfaction. This, according to the study, means they likely feel happier than the majority of people who are unsatisfied with their pay.
While Oh’s study seemed to insist that the perception of your financial reality can make or break your happiness, it definitely doesn’t dismiss the real financial struggles that people are facing in their daily lives. Of those who were dissatisfied, 80% say they struggle to keep up with the cost of living. About 70% feel they aren’t paid enough for the quality or amount of work they provide. Over half said they don’t earn enough to cover their bills.
Ultimately, when your salary prevents you from affording basic needs, it becomes quite impossible to separate your emotions from money.
Nia Tipton is a staff writer with a bachelor’s degree in creative writing and journalism who covers news and lifestyle topics that focus on psychology, relationships, and the human experience.
