Have you ever asked yourself how much money do you need to be happy? Well, more or less every people ask themselves once in life. It’s important to know what it would take to feel happy.

But is money important for happiness? Before searching for the answer, first, understand what you want in life. Do you want to travel the world in a private jet? Are you looking for a luxurious life to live? How do you want to spend your life after retirement? Depending on these, approach to construct and protect your investment portfolio.

However, without understanding the basic needs to live a joyful life and working to fulfill it, most people jump on a blindly selected number. Furthermore, the price to live comfortably varies from person to person.

Additionally, not always money can buy happiness. Let’s look at some facts to learn how much money do you need to be happy and why.

Your “Perfect Salary” To Be Happy

Money is the main key to happiness to feel valued or add value to people's lives around you. Therefore, one must earn a fair dollar amount to be happy.

In 2010, Daniel Kahneman and Angus Deaton at Princeton University showed in a study that people tend to be happy when they make at least $75,000 a year. However, your emotional well being or how you feel daily won’t improve once the income exceeds $75,000/year.

But you can still live satisfied. Keep in mind, being rich doesn’t make you happy every time.

Suppose a doctor earning $1million per year and an investor earning the same from stocks, real estate, bonds or other ways isn’t the same. The doctor won’t get paychecks when they stop working, but the investor can still make money sitting at home.

Eventually, in 2018, Purdue University estimated an ideal income using the Gallup World Poll’s data. An individual needs $95,000 for a satisfying life, while $60,000-$75,000 is enough for emotional well-being.  Meanwhile, a salary of more than $105,000 decreases the happiness level.

Why Can’t You Be Happy Even Being Rich?

Do you think more money can buy happiness? Eventually, it doesn’t. Most of the time, people care what others think about them. You may get unhappy once you can’t maintain the standard as others.

What is the psychology behind it? According to Brad Klontz, a financial therapist and psychology professor at Creighton University, people compare themselves with others.

Furthermore, according to “hedonic adaptation”, a psychological phenomenon, people’s expectations and lifestyles changes with the change in life. That’s why even being rich; you can’t stay happy.

Five Factors To Know How Much Money Do You Need To Be Happy

Is it difficult to be happy? Well, it isn’t. But to stay happy, you need to understand the five factors of life. In this way, you can buy happiness.

1. First and foremost, understand how you like to spend time. It may be with friends or family and other loved ones. Weekend trips, dining, along with activities like hiking or fitness membership, require a certain amount to spend. So, write down your priorities to estimate a monthly expenditure.

2. To set the happiness benchmark, evaluate your daily expenses. However, it differs in countries or regions. So before moving to another place or buy a house, search in-depth about the area and media cost of living. After all, the amount requires to produce an annual cash flow depends on how you’re living.

3. Annual traditions like a fancy dinner party, giving gifts or international trips can cost you extra money. So look up upcoming traditions to estimate the cost and save an amount throughout the year.

4. Who is counting on you? It may be your children, aged parents or someone you love. It’s crucial to know their goals to understand how much money do you need to be happy. So talk to them, do some research on the yearly cost to fulfill their desire and make a savings plan.

5. Finally, don’t forget to prepare for some unexpected event. Emergencies can dump on your happiness and increase the stress level. Ideally, you can save as little as three months or else as much as two years’ expenses.

Conclusion

How much money needs to be happy varies with the situation and time. Focus on your basic needs and what brings joy to your life before choosing an amount.

As a matter of fact, you can’t buy everything with money. Your family, friends and their love are the core center of a peaceful and happy life. However, money is the resource to enhance that core. Still, you must know earning money means having the freedom to live a life you wish for.