When it comes to placing a dollar amount on “happiness” we often reach for the old adage… money can’t buy it. It’s a lovely saying that emphasizes the value of the un-purchasable things in life, but it’s not quite accurate. It turns out that, while you can’t buy happiness in a can (yet,) you can find the sweet spot where your income or retirement funds support increased happiness. That’s the place where you have enough money to be comfortable, but not so much that you’re casting aside the things money really can’t buy in pursuit of financial gain.
Researchers have found that the so-called “sweet spot” exists between 60,000 and 75,000 dollars per individual. The data suggests that this is because income under 60,000 per individual can make you feel financially stressed or insecure. Income over 75,000 can result in an unhealthy pursuit of financial wealth that comes at the sacrifice of things like relationships and mental well-being. Some studies also suggest that taking into account factors like social evaluation, a slightly higher figure- around 95,000 may be beneficial as well.
We as humans also experience a phenomenon called the hedonic treadmill, which is the concept that our happiness levels tend to return to a baseline quickly no matter what our circumstances. This means that even if you win the lottery, despite the initial euphoria you may experience, you’re not going to spend the rest of your life pumping your fists and shouting from the rooftops.
Despite the fact that it seems you can sort of place a dollar amount on happiness, how you spend your money also counts. Time magazine has a list of the most fulfilling ways to spend your money in order to improve your happiness. Focusing on things like helping others with your money or buying experiences like vacations tend to improve overall happiness while buying shiny new gadgets tend to have fleeting results.
Overall “happiness” is an elusive concept, but having enough money to avoid financial strain and not so much money that you feel increased pressure or make sacrifices seems to hit the right balance.
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