Here Is The Income Level At Which Money Won't Make You Any Happier In Each State (2024)

FAQs

At what income level does happiness not increase? ›

Kahneman and Deaton found that happiness increased with income, but only to a point — there was no further progress beyond about $75,000 ($108,000 in today's dollars).

What do studies say about money and happiness? Purdue University found the ideal average income for people worldwide is $95,000 and $105,000 in the U.S. Beyond that, satisfaction with life deteriorates, it said.

Money actually does increase happiness well beyond the $75,000 threshold, overturning the previous research. The researchers found that even among people earning $200,000 or more, additional money continues to yield additional happiness. There does not seem to be a limit on money's influence on emotional well-being.

Just how much money do we need to earn to be happy nowadays? The answer is a bit more than the often cited $75,000 per year. In a 2023 paper published by the Proceedings of the National Academy of Sciences (PNAS) journal, key findings suggest that earnings up to $500,000 boost and buy overall happiness.

Participants' reported wellbeing did, in fact, increase along with income, up to and well beyond earning $75,000 a year. What's more, the researchers found that happiness really only plateaus as income increases — above roughly $100,000 a year — for people who were already somewhat unhappy to begin with.

For example, making more money can make us do things that don't make us happy—such as working more and spending less time with friends and family (Aaker et al., 2011). Further, more money brings with it more choices, which doesn't necessarily bring happiness.

In fact, to live comfortably in 99 of the largest U.S. metro areas, you'll need a median income of $93,933.

Overall, Galbraith's study suggests that people with very low incomes achieve a level of life satisfaction that is just as high, and in some cases higher, than that found in wealthy nations. The authors also note that their findings are good news for planetary sustainability.

California. California's notoriously high cost of living is on display here, with just over $143,000 a year being needed to secure happiness. California's unemployment rate of 4.7% trails only Nevada in the study.

“A common misconception is that people who are poor or have low incomes can't save,” she said. “Evidence from savings programs and research shows they can.” McKernan and the other experts we spoke to for this piece provided some steps for people with smaller incomes to start building their savings.

What rich people don t waste money on? ›

The 10 things that millionaires typically avoid spending their money on include credit card debt, lottery tickets, expensive cars, impulse purchases, late fees, designer clothes, groceries and household items, luxury housing, entertainment and leisure, and low-interest savings accounts.

Find the Right Balance

Being asset rich but cash poor is a risky financial position because an unexpected expense can derail your finances. Balancing investing and saving, sticking with a budget and building an emergency fund can help you avoid becoming cash poor.

According to the latest figures by the Bureau of Labor and Statistics, the average salary in USA per month is $5,677 or $68,124 per year. As of 2023, the gross minimum salary in the USA is $32.75 per hour. Salaries range from $32,916 to $112,268 per year and include housing, transport, and other benefits.

How much does the average American make a year? According to the U.S. Bureau of Labor, the average U.S. annual salary in Q4 of 2023 was $59,384. This is up 5.4% from the same time period in 2022 when the average American was making $56,316 per year.

Globally, the study found that the ideal income point for an individual is $95,000 for life satisfaction and between $60,000 to $75,000 for emotional well-being. In North America, the individual income level for life satisfaction was found to be $105,000 per year.

Daniel Kahneman and Angus Deaton , both professors at Princeton University and Nobel Prize laureates, published a landmark paper in 2010 that showed that a rise in income increased people's well-being, but only to a ceiling of $75,000, beyond which there was no increase in well-being.

While people have different qualifications and different ideas of what constitutes a good salary, most would consider $75,000 per year to be good pay.

The rank hypothesis contrasts with traditional reference income hypotheses, which suggest utility from income depends on comparison to a social group reference norm. We find that the ranked position of an individual's income predicts general life satisfaction, while absolute income and reference income have no effect.