Although money may not be able to buy you love, apparently it can buy you more satisfaction with your life. A new study conducted by Matthew Killingsworth, a senior fellow of Penn’s Wharton School, refuted the common wisdom that “money can’t buy happiness.”
While past studies have concluded that a higher income generally improves satisfaction with your life, your emotional well-being seemed to stop improving after an income of $75,000 ($90,000 in today’s dollars). Utilizing an iPhone app called Track Your Happiness, Killingsworth was able to gather real time data of 1,725,944 samples from 33,391 employed individuals by questioning them at random times about their activities and feelings.
His study concluded that satisfaction with life and emotional well-being continued to have a positive correlation with rising income, with no noticeable change around $75,000.
Killingsworth mentions that increases in wealth in his study were measured on a logarithmic scale, meaning that each additional dollar you earned matters differently, depending on the level of wealth. Someone making $30,000/year will see a greater impact with each dollar, than someone making $300,000/year.
Lower income levels are likely to correspond with less autonomy, more tedious jobs, greater financial insecurity as well as difficulty paying bills. Striking the right balance between pursuit of financial security and emotional well-being and satisfaction with your life is a challenge we all face. Suffice it to say that there is no external number that will indicate you have achieved the right balance. That is something only you can decide.
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