Asked 2d ago
That’s a very deep question… There was actually a recent CNBC article that talks about the (sort of) perfect ‘happiness’ salary.
Disclaimer: The numbers reflected are in USD because the study was conducted across 9 regions and the World Bank’s private purchasing power parity (PPP) ratios was used.
Based on a 2018 study, the ideal income point for individuals is $95,000 for life satisfaction and $60,000 to $75,000 for emotional well-being.
There was also a clear satiation effect at $105,000 for life satisfaction.
According to the APA Dictionary of Psychology
Satiation refers to:
the satisfaction of a desire or need, such as hunger or thirst; another name for satiety.
the temporary loss of effectiveness of a reinforcer due to its repeated presentation.
This means that when people earned more than $105,000, their happiness levels either leveled off or decreased.
As humans, we need money to meet our basic needs such as healthcare and shelter (aka the lowest level of Maslow’s hierarchy of needs). If a person grows up without access to these basic resources, having more money definitely makes a big difference to their life and overall well-being.
Apparently once we hit that middle class, there isn’t much correlation with money and happiness, though this is definitely difficult to put into perspective because most of us operate under the assumption that money will solve all (if not most) of our problems.
To be honest still sounds like quite a lot to me (student loan, BTO, renovations, car servicing, child raising…) haha but who am I to argue with a financial therapist and psychology professor?
However, as humans, at the end of the day we struggle with existential issues like “what’s the meaning of life” and “who am I?”. These types of questions don’t go away even if you get more money.
Of course pondering these questions in a private bungalow while sipping on some old age whiskey, would be better than scampering around to meet ends meet but, you get the idea…
But there are actually some ways that you can spend money that correlates with happiness!
Instead of splurging and “treating yourself” to material purchases, spend money on personal growth, connecting with people and contributing to the community. This is because material purchases often hang around, so we get used to them.
Spend on experiences instead of items!
Another surprising way to spend is actually to buy yourself time. How? I mean time-saving services. Another separate study found that when people paid for time-saving services — such as ordering takeout or outsourcing someone to run errands — they had higher levels of life satisfaction than when they bought material items.
But hey! Instead of correlating income to happiness, here’s another perspective: the idea that we are not spending money but hours of our life for things.
Hope that we soon reach a stage of our lives where income doesn't necessarily affect our happiness. Till then, the SeedlyCommunity will keep hustling together! 💪
Details of the 2018 Study:
Happiness, income satiation and turning points around the world
Nature Human Behaviour VOL 2 JANUARY 2018
The International dollars figures reported are interpretable simply as US dollars after using the World Bank’s private purchasing power parity ratios.
Nine Regions explored: Western Europe/ Scandinavia, Eastern Europe/the Balkans, Australia/New Zealand, Southeast Asia, East Asia, Latin America/the Caribbean, Northern America, the Middle East/North Africa and Sub-Saharan Africa.
Emotional well-being was measured with a variety of dichotomous indicators asking subjects whether they had experienced an emotional state for much of the day yesterday.
For positive affect, the emotional states were happiness, enjoyment and smiling/laughter.
For negative affect, the emotional states were stress, worry and sadness.
Life satisfaction was measured using Cantril’s Self-Anchoring Striving Scale.
This measure instructs participants to imagine a ladder with steps labelled 0–10, where 0 represents the ‘worst possible life’ and 10 is the ‘best possible life’.
Participants indicate at which step of the latter they personally stand at the present time.
The scale has been cited as perhaps the best tool for measuring life evaluation.
My question in return is what would be the trade off?
If I have to work 2x harder for 2x the money then it will not be worth it at all.
There are people who are earning $300k per year and still slogging harder for more money to maintain their lifestyle.
There are also people who are earning $5k per month but am extremely happy with what they have because they are living without any stress. :)
It really depends on the individual. For some, happiness stems from relationships and well-being and therefore money or income does not play a very big part. For others, happiness comes from material goods and experience and this often requires money in order to be achieved.
To each his own. Be happy with what you have.