Examining the ties between income and happiness

How much money would you need to be happy?

Three different studies found three different salaries that people would consider adequate: $50,000, $75,000, and $161,810 a year. Those studies, rounded up in a recent article by Fast Company, differed in more than their bottom lines; for example, the $161,810 amount reflected the views of people on four continents. The lesser amounts came from U.S. studies.

But the article warned that, whatever the optimum number, wealth is not the same thing as happiness. "Take your focus off the money," it said, "and suddenly happiness becomes a lot more affordable."

While the studies do not agree on the amount of money it takes to make people happy, they do agree that once you go above the prescribed amount, more money does not make you happier.

But ideas of money seem indivisible from our perception of happiness. Hal Hershfield, assistant professor of marketing at the New York University Stern School of Business, wrote recently:

"Does money matter? Yes, but it depends on what you mean by 'matter.' You may be more satisfied with your life if you have more money, but this doesn't necessarily mean you'll be happier. Happiness and satisfaction are simply different things."

Happiness, in fact, may ensue when people focus on giving, not getting.

As author Laura Vanderkam says: "Humans are social creatures and giving things to other people is one of the most natural ways that we have of establishing bonds ... I learned looking at the research that spending money on other people, gifts, and charity is correlated with happiness. Another thing is spending on your social network. So spending on getting together with friends, spending on experiences — things like travel. All of those are ways to buy happiness."

6 best money tips for young people

• Save one-third of your income.

• Don't scrimp on career-related investments.

• Cultivate your most ambitious dreams. • Pay off all but your cheapest student loans early.

• Don't wait to invest until you have "extra money."

• Give back — on your own terms.

Source: USNews.com

LEARN MORE ABOUT MONEY AND HAPPINESS:

• Can wealth really buy happiness?
An essay by The Daily circuit guest Laura Vanderkam.

• TED Talk: Money can buy happiness

• Do We Need $75,000 a Year to Be Happy?
"Most Americans — 85% — regardless of their annual income, felt happy each day." (Time)

• The Salary That Will Make You Happy (Hint: It's Less Than $75,000)
"It seems the sweet spot is somewhere between $50,000 and $75,000." (Forbes)

• Money Can't Buy Happiness? New Study Says $161,810 Can...
"The firm found that generally Europeans have their sights set far lower. Perhaps surprisingly, given its concentration of high and ultra high net worth individuals and relative economic strength, Germans required the least amount of income to feel happy: $85,781." (Wealth Briefing)

• The pricetag of happiness? $75,000
"A new study out of Princeton University shows that money can help with happiness, but only to a point." (MPR)

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