Money really can buy happiness, scientists claim – but only up to a point.
Researchers have found an annual income of between £43,000 ($60,000) and £54,000 ($75,000) is the ideal amount for emotional well-being.
They also discovered an income of £68,000 ($95,000) is the maximum amount people should earn to be completely satisfied with life.
Earning any more than this can cause people to be miserable because they become too focused on material goods, researchers claim.
The old adage that money can’t buy you happiness appears to have been debunked by a new study that has identified the exact amount needed. Experts found that the ideal income is £68,000 ($95,000) for maximum levels of life satisfaction (stock image)
Psychologists at Purdue University based their findings on data from the Gallup World Poll.
This is a representative survey sample of more than 1.7 million people from 164 countries.
They found there there is an optimal point of income that makes an individual happy.
Anywhere between £43,000 ($60,000) and £54,000 ($75,000) was the ideal income for emotional well-being.
The figure of £68,000 ($95,000) was the point at which people felt that they were achieving success in their lives, dubbed life evaluation by the researchers.
This amount is for individuals and would likely be higher for families.
‘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,’ said Andrew Jebb, lead author of the study and doctoral student at the university.
‘There was substantial variation across world regions, with satiation occurring later in wealthier regions for life satisfaction.
‘This could be because evaluations tend to be more influenced by the standards by which individuals compare themselves to other people.’
Emotional well-being is about a person’s day-to-day emotions, such as feeling happy, excited, or sad and angry.
Life evaluation, or life satisfaction, is an overall assessment of how one is doing and is likely more influenced by higher goals and comparisons to others.
For the study, estimates were averaged based on purchasing power and questions relating to life satisfaction and well-being of the survey sample.
The study also found that once the threshold was reached, further increases in income tended to be associated with reduced life satisfaction and a lower level of well-being.
Researchers found that once the optimal happiness income threshold was reached, further increases in income tended to be associated with reduced life satisfaction and a lower level of well-being (stock image)
The researchers suggest this may be because money is important for meting basic needs, for example buying necessities or loan repayments, but only to a point.
After the optimal point of needs is met, people may be driven by desires such as pursuing more material gains and engaging in social comparisons, which could actually lead to lower well-being.
‘At this point they are asking themselves, “Overall, how am I doing?” and “How do I compare to other people?”‘ Jebb said.
‘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 full findings of the study were published in the journal Nature Human Behaviour.
Previous research has found that spending money to buy free time, including paying people to cook or clean for you, leads to greater life satisfaction.
They also found that people were reluctant to spend on time saving purchases.
This, they say, is because of the ‘cult of busyness’ that leaves people afraid of appearing lazy – a feeling which they say we should overcome.
The study, led by researchers at the University of British Columbia and Harvard Business School, surveyed more than 6,000 adults in the US, Denmark, Canada and the Netherlands.
Respondents were asked if and how much they spent each month on a time saving purchase.
They also rated their life satisfaction and answered questions about feelings of stress related to time management.
Psychologists found paying to delegate household chores is linked to happiness, because it lessens feelings of having too much to do and not enough time to do it.
This led to greater life satisfaction and improved mood.
Despite the benefits, the researchers were surprised to discover how few people choose to spend their money on such luxuries.
It is unclear why this might be the case, but one of the researchers speculated on one of the reasons.
Speaking to MailOnline, study lead author Ashley Whillans, said: ‘Previous research suggests that busyness is seen as a status symbol, at least in North America.
‘Indeed, it is socially acceptable and even socially desirable to seem busy, to overwork, and to “do it all” without asking for help.
‘This “cult of busyness” might prevent people from choosing to make time-saving purchases.
‘Our research however suggests that we should overcome our fear of seeming lazy or incompetent and spend money on time-saving purchases. Doing so, can promote happiness and reduce stress.’