The Beatles taught us that money can’t buy love, but did you know it can buy happiness? This is certainly not the theme of most media these days. The Victorian era A Christmas Carol shows readers that an underpaid husband and father earning what was close to the minimum wage in today’s dollars is happier than his crochety boss with no family or friends. In movies and TV, we often hiss at the ultra-rich villain and cheer on the poor schlub who has found joy in life despite being one bounced check away from financial ruin.
Studies show that reality is the opposite. Money buys happiness, but only up to a certain point.
Deficiency needs and growth needs
A long time ago, I took some psychology classes, and I remember learning about this hierarchy of needs. The premise is that only once their basic survival needs are met can humans develop psychological issues to other things like personal fulfillment.
Oh, great. I have crushing anxiety and an eye that’s been twitching for six months because I’m so good at housing and feeding myself. Nice.
The same premise is true of our finances. Studies have shown that people with more money are happier, seemingly because they don’t have to spend brain energy on worrying about their survival (deficiency) needs.
Living in a first world country often means that our deficiency needs are met, even if we’re not terribly happy with our current situation. Even many lower income families can say their physiological and safety needs are met. Money and the wealth of citizens of the US has allowed for almost every one of us to not worry about whether the roof will cave in while we’re sleeping or whether we can afford to buy a bag of flour.
There is a limit
Studies have shown that there is a limit to how much we earn that directly affects our happiness. Apparently, that limit is $75,000 USD. “Happiness remains basically unchanged once household income exceeds $75,000, though overall life evaluation keeps improving.”
No one is saying an income over $75,000 isn’t worth pursuing. Making a shit ton of money does increase life satisfaction, but not happiness. Having a higher income means you can live in…