This is the exact amount of money that makes people happy

When we think about the markers that define a living wage, emotional well being rarely comes to mind. On balance, fair compensation describes earnings that allow people to cloth, feed, and house themselves.  Some psychologists have argued that there isn’t any reason that a sense of satisfaction shouldn’t be considered a basic need. 

According to a new study from Purdue University, salary plays a huge role in how citizens feel about their trajectory. Participants who secured at least $95,000  a year tended to feel gratified with their life, while those who achieved between  $60,000 to $75,000 a year were more likely to express emotional fulfillment.

“That might be surprising as 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, but we now see there are some thresholds,” explained Andrew T. Jebb, the lead author and doctoral student in the Department of Psychological Sciences. “It’s been debated at what point does money no longer change your level of well-being. We found that the ideal income point is $95,000 for life evaluation and $60,000 to $75,000 for emotional well-being. Again, this amount is for individuals and would likely be higher for families.” 

Happiness, income satiation and turning points around the world

“Income is known to be associated with happiness, but debates persist about the exact nature of this relationship. Does happiness rise indefinitely with income, or is there a point at which higher incomes no longer lead to greater well-being?” the authors ask. “These findings on income and happiness have practical and theoretical significance at the individual, institutional and national levels. They point to a degree of happiness adaptation and that money influences happiness through the fulfillment of both needs and increasing material desires.” 

The paper’s findings were derived from Gallup World Poll data of over 1.7 million individuals from 164 different countries.

The respondents were queried about the pillars of power, life satisfaction and well-being. The responses indicated that a financial threshold seems to animate these cornerstones more than a magic number scenario. 

Additionally, once these financial thresholds were reached, further increases in income often led to reduced life satisfaction and a lower level of well-being. The authors speculate this may be because money serves the previously mentioned basic needs but after these needs are met, people replace them with material desires such as pursuing more material gains and engaging in social comparisons.

“At this point they are asking themselves, ‘Overall, how am I doing?’ and ‘How do I compare to other people?’” Jebb concluded. “The small decline puts one’s level of well-being closer to individuals who make slightly lower incomes, perhaps due to the costs that come with the highest incomes. These findings speak to a broader issue of money and happiness across cultures. Money is only a part of what really makes us happy, and we’re learning more about the limits of money.”

The research conducted by Jebb and Louis Tay was supported by Purdue’s Department of Psychological Sciences. Ed Diener and Shigehiro Oishi from the Department of Psychology at the University of Virginia additionally contributed to the study.

The paper was written by Amy Patterson Neubert

CW Headley is a reporter for the Ladders and can be reached at