How much money do you need to be happy? A researcher finally reveals the magic number

The idea that money can't buy happiness has been proven wrong by science, to some extent. Studies show that with rising incomes, the happiness levels of people rise. Contrary to popular belief, the levels continue to rise even beyond a certain income threshold. So how much money is needed to be happy? Turns out, science has an answer for that too.

Here's how much money you need to be happy

According to research conducted by Purdue University in 2018, the average amount needed for individuals to be happy stood at $75,000 to $95,000 per year. Psychologist, Andrew T. Jebb, and his team analyzed the data provided by the Gallup World Poll of 1.7 million individuals from 164 countries, to arrive at this conclusion.  

The team examined participants' responses to questions relating to life satisfaction and well-being to determine subjective well-being (SWB). They found the magic number that was needed for 'income satiation' which varied from place to place across the world. 

"We found that the ideal income point is $95,000 for life evaluation [overall life satisfaction] and $60,000 to $75,000 for emotional well-being [day-to-day happiness]," the official press release stated. Researchers added that this amount was for individuals and it may go up for families.  

Furthermore, the satiation points significantly vary from country to country, depending on how wealthy the nation is. As per the study, in North America, life satisfaction can be reached at $105,000 while the same costs just about $35,000 in Latin America. For Australia, the magic number was $125,000, while for Southeast Asia, it was $70,000. 

The magic number also varied between genders. The study found that globally it was cheaper for men to be satisfied with their lives at $90,000 than women who needed $100,000 to be happy. 

People with low and moderate education were satisfied with an income of $70,000 and $85,000 respectively, while people with a higher education needed $115,000. 

Here's the least amount of money you need in America to be happy

Researchers of the Pursdue study added that happiness is subjective and the cost of living comfortably can vary from person to person. More recently, GOBankingRates analyzed the cost of living in all 50 states of the U.S. to determine how much money people needed in each state to make a living. Here are the states with the least money needed to earn a living wage:

Mississippi- $45,906

Oklahoma- $46,024

Alabama-$46,577

Arkansas- $47,111

Kentucky- $47,318

Kansas- $47,379

West Virginia- $47,732

Missouri- $47,771

Iowa- $48,518

Georgia- $49,051

Does more money mean more happiness?

Several studies, including the Purdue University analysis, suggested that happiness levels see a decline after a certain level of income. A famous 2010 study published by the Nobel prize-winning cognitive scientist, Daniel Kahneman, claimed the threshold to be $75,000.

However, a 2023 collaborative study published by Matthew Killingsworth of the University of Pennsylvania and Kahneman suggested that there wasn't a threshold for the majority and the more money people had, the happier they were. 

The study found that for 80% of people, happiness rises with income past the threshold. However, for the remaining 20%, an unhappy minority, the happiness levels rise up to only $100,000 (the same $75,000 adjusted for inflation), per a Forbes report.

Editor's note: This article was originally published on July 20, 2024. It has since been updated.