Study reveals: Does money really make you happy?

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“You can’t buy happiness.” You’ve probably all heard this phrase before. But is it true? Even scientists are looking for the answer to this riddle, with surprising results…

Does money really make you happy?
Money can’t directly buy happiness, but it can certainly buy things that make you happy: A concert ticket, new shoes or a new smartphone. It can all get pretty expensive in the long run… Not being able to afford these “luxuries” makes you unhappy—OR?

And let’s not forget: In times of rising prices for almost everything people need to live, such as rent, food or train tickets, it would be nice to have more money to be able to live more carefree.

Studies look for happiness through money
Study 1: A lot of money does not mean a lot of happiness
The question “Does money make you happy?” is one that scientists have been investigating for years. Probably the best-known study in this field was conducted in 2010 by Nobel Prize winner Daniel Kahneman.

For this study, 1,000 US citizens were surveyed on the topic for over a year and then over 450,000 responses were evaluated.

At the time, it was found that money makes people happy—but ONLY up to a certain point. Above an annual income of 75,000 dollars, more money no longer influences people’s well-being.

Today, 14 years later, this value would be 108,000 dollars, or 101,000 euros per year, considering inflation.

The study concluded that people are not happier with their lives if they earn more. Happiness is much more likely to stagnate at a “saturation level,” so more money does not necessarily mean more happiness.

Study 2: Happier with a big bank account
However, another, more recent study from 2021 by Matthew A. Killingsworth found the opposite.

The new study was unable to confirm the previous study’s “saturation level.” In fact, the happiness of people with higher wealth continues to increase, according to the new study.

Killingsworth surveyed over 33,000 US citizens, collected over 1.7 million data points and found that happiness through money does indeed increase with income—and “the limit is even ‘open at the top,’ Killingsworth states.

Study 3: Does money make you happy or not?
In a new study, Kahneman and Killingsworth reached a consensus!

They finally published a new study in 2022 and found that the assumption that more money would NOT make you happier resulted from missing responses from people with a very high income. In the first study, happiness could not be measured beyond a certain amount of money.

However, the results that money can indeed make people happy have now been confirmed.

“The money-happiness curve rises even after a value of over 500,000 dollars in annual earnings,” Killingsworth explained to the US media brand CBS in an interview.

“I think it’s because people with more money also have more control over their own lives! In my opinion, that’s even more important than being able to buy nice things.”

BUT: Money alone does not make you happy
So money gives you security, and security makes you happy. But that’s not the end of the story!

Because salaries and wealth can be very far apart—not necessarily the feeling of happiness!

On a happiness scale of 1 (very unhappy) to 7 (very happy), millionaires and even billionaires gave a happiness score of between 5.5 and 6 in the study.

People with an annual income of 100,000 dollars were at 4.5 and people with an income of between 15,000 and 30,000 dollars per year were only slightly lower, at just over 4.

So, these values are not really far apart (despite the significant difference in wealth).

Conclusion: Money ALONE does not make you happy! Other factors are just as important, such as a healthy social environment, family, friends, hobbies, health …

“If a rich person is unhappy, more money will not make them happier,” says Killingsworth. Chronically unhappy people do not improve with more money. Positive people, on the other hand, can definitely become happier through money.

And what can we learn from this? “Real happiness is about more things than money! But money can contribute to overall happiness for most people,” says Killingsworth.

The good thing is that you often have it in your own hands to improve your financial situation step by step, or at least to consolidate it and thus increase your sense of happiness. Build up a financial cushion by saving, applying for a better-paid job, getting a good education or further training. These are just a few ideas for influencing your own money-happiness level.

However, for this increased wealth to really make you happier, you must also be happy in other areas of life!