Could you be happier if you had more money? New research conducted by digital savings marketplace Raisin shows that money maybe does buy happiness. At least to a certain extent. And it turns out that countries around the world need specific and different amounts to reach a certain level of happiness.
The study looked at data from the Happy Planet Index as well as wellbeing reports from the Office for National Statistics (ONS). The conclusion? Having a safety net eases stress and increases feelings of wellbeing around the world. And these feelings are associated with specific earning amounts.
Money and happiness in the UK
When looking at the overall happiness score, life expectancy and earnings, Raisin UK found that the top 10 happiest countries in the world have an average salary of over £64,000. Luxembourg tops the list with a GDP per capita of £94,589 and 146 points in the ‘does money buy happiness?’ index. Ireland, Singapore, Norway and Switzerland take the other top five spots.
The UK falls into spot number 17 with 126 points. That puts it behind Finland and Germany but above France and New Zealand. According to the study, Brits need a salary of at least £30,000 to be happy, but this number changes from city to city.
The highest happiness ranking in the UK goes to Winchester, where residents need £35,346 to ‘pay’ for happiness but have an impressive happiness rating of 104. London sits at number 12 with a happiness score of just 77 and a much higher price for happiness at £41,220.
Other studies agree
The close relationship between money and happiness isn’t a brand new thing either. In 2016, a study called How Your Bank Balance Buys Happiness found that having a financial buffer in your bank account is associated with a feeling of well-being. This applies to money in your checking or savings account, as well as investments or retirement funds.
Another study published in 2021 tracked happiness in relation to income based on over 1.7 million experience-sampling reports. While early research had shown that well-being rises linearly with income but only up to incomes of $75,000/yearly, the 2021 study shows that there’s no plateau. In fact, people with incomes above $80,000 still reported increased day-to-day well-being.
How to use money to ‘buy’ happiness
So how exactly does money buy you happiness? And what actions can you take today to use your money more wisely to raise your level of happiness?
1. Build a safety net
People are happier when they’re not constantly worried about money. And you don’t even need a large amount in your bank account for that. Having an emergency fund saved up that will cover three to six months worth of expenses can help. If that amount sounds intimidating, focus on saving enough to cover one month’s expenses at a time.
2. Spend your money on experiences
Experiences can mean anything from trips to special concerts to spa visits. Buying yourself the latest phone or an expensive pair of shoes might seem great at first. But ten years down the line, you’re unlikely to remember you even owned those things. But go hiking with your dog or take that trip you’ve been dreaming about and suddenly your money will bring a lot more happiness. And not just now, but years down the line when you relive those memories.
3. Be generous
According to the World Happiness Report, people are happier when they give. It doesn’t even have to be a large amount. Paying for the coffee of the person behind you in the queue at the coffee shop or tipping your server double the expected amount won’t break the bank, but research shows it will make you – and the recipient – much happier.
