Money actually can make you really happy. Here’s why

For those who say “money can’t buy happiness”, it certainly appears that, well, money certainly can buy you some happiness. In fact, it can buy you a whole lot of happiness, according to a new study.

The magic number

These findings aren’t exactly new. A study out of Purdue University found that people generally feel happy when making about $65,000 annually, while making near $95,000 can provide them with feeling financial secure. A Princeton University study from 2010 said people are the happiest when they make about $75,000 a year. Of course, this all depends on where you live and what your spending habits include — $75,000 in New York City as it is someplace else.

Although research has found that happiness can dip with the more money one actually makes (consider things like housing, student loan debt, and other bills), a new paper publishing in Proceedings of the National Academy of Sciences found that money has a boatload of influence on your happiness — and it doesn’t just stop at any number.

“Track Your Happiness”

Researchers from the University of Pennsylvania found that despite previous research stating money no longer influences happiness once you reach $75,000, there’s actually a significant impact it can have on your well-being once you make much more.

Lead researcher Matthew Killingsworth compiled nearly two million data points from more than 33,000 participants to gauge how they felt in their lives. He created an app called “Track Your Happiness”, which allowed people to tally how they felt daily.

The app asked simple questions like, “How do you feel right now?,” and responses were scaled from “very bad” to “very good.” Participants were also asked how satisfied they were in their current life situation, according to the paper. Other measures were recorded to access how people felt, which included positive and negative feelings.

Killingsworth said he was interested in finding “repeated snapshots” of people’s lives because they provides a “representative sample of the moments” in which people were experiencing. When he compared it to the study that said well-being plates once an annual household income reaches $75,000, his findings revealed that money never stopped making people feel better, no matter how much they made.

“It’s a compelling possibility, the idea that money stops mattering above that point, at least for how people actually feel moment to moment,” Killingsworth said in a statement. “But when I looked across a wide range of income levels, I found that all forms of well-being continued to rise with income. I don’t see any sort of kink in the curve, an inflection point where money stops mattering. Instead, it keeps increasing.”

He said that no matter how much one makes, each dollar means the same to a family that made $75,000 together compared to one that made $300,000. He said higher earner can be perceived as more happy because they have more control in their lives, which can be seen throughout the coronavirus pandemic.

“When you have more money, you have more choices about how to live your life. You can likely see this in the pandemic. People living paycheck to paycheck who lose their job might need to take the first available job to stay afloat, even if it’s one they dislike. People with a financial cushion can wait for one that’s a better fit. Across decisions big and small, having more money gives a person more choices and a greater sense of autonomy.”