We’ve all heard the phrase, “money can’t buy happiness,” but researchers from the University of Michigan have found evidence to the contrary. Evidently, money can buy happiness — but it's the definition of happiness that changes from person to person.
So the researchers looked at an individual’s well-being – happiness, satisfaction with life, basic needs being met – and determined that “The relationship between well-being and income is roughly linear-log and does not diminish as incomes rise. If there is a satiation point, we are yet to reach it." Source: The Brookings Institution (PDF)
The more money a person has, the more money it takes to make him happy, but there isn’t some magical point in which more money does not make one happier. This is in contrast to a 2010 study that suggested a $75,000 salary was the happiness cap. The study was based on input from more than 450,000 Americans.
In that study, mood changes based on income stopped at around $75,000, but well-being and a sense of accomplishment continued to rise. The University of Michigan researchers note that the previous study used a completely different set of measurements to define well-being.
I’m not a researcher or an economist, but I can say from personal experience that I was certainly more stressed out when I was younger and making less than $20,000 annually. I had to pay a small mortgage on a townhome, healthcare costs, groceries, utilities and more. I didn’t even have a car note and so I walked a mile to the bus stop –—not bad for my overall health but on the hot summer Arizona days, it was grueling.
Now, I still have a mortgage to pay but as our family and income grew, so did our house. I also have healthcare costs and with two kids on the autism spectrum, those costs have gone up significantly. Our lifestyle grew as our income grew, but I can honestly say that I am less stressed now than I was when I earned less. Maybe it is because I have a family that I love or maybe it is because we have a salary that allows us to live a comfortable lifestyle.
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