How much money do you need to make to be happy in Canada? A new study from Purdue University has found that there is an optimal point to how much money it takes to make an individual happy, but that the amount varies worldwide.
The price of happiness is about $77,500
For Canadians – and North Americans as a whole – the ideal income is $95,000 for what they call “life evaluation” and $60,000 to $75,000 for “emotional well-being.” (This averages out to about $77,500.)
Anything more makes you unhappy, according to the research.
This seems to confirm the findings of a previous study, conducted at Princeton and released in 2010. That now-famous research found that up to about $75,000 a year, money could buy happiness. “The lower a person’s annual income falls below that benchmark, the unhappier he or she feels,” Time magazine reported at the time. “But no matter how much more than $75,000 people make, they don’t report any greater degree of happiness.”
The new study has broken things down a little bit more.
Comparing yourself to others diminishes happiness
According to a media release, “emotional well-being,” is about one’s day-to-day emotions, such as feeling happy, excited, or sad and angry. “Life evaluation,” on the other hand, or “life satisfaction,” is an overall assessment of how one is doing and is likely more influenced by higher goals and comparisons to others.
Andrew T. Jebb, the lead author and doctoral student in the Department of Psychological Sciences at Purdue said, “It’s been debated at what point does money no longer change your level of well-being. We found that the ideal income point is $95,000 for life evaluation and $60,000 to $75,000 for emotional well-being.” This amount is for individuals, and would obviously be higher for entire families.
Jebb and colleagues also found that there was substantial variation across world regions, with satiation regarding “life satisfaction” occurring at higher levels of income in wealthier regions. Jebb said. “This could be because evaluations tend to be more influenced by the standards by which individuals compare themselves to other people.”
Or it could be because the cost of living is higher in wealthier countries.
Regardless, the comparison is, a Teddy Roosevelt once (probably) said, “the thief of joy.”
To get their numbers, the researchers used data from the Gallup World Poll, which is a representative survey sample of more than 1.7 million individuals from 164 countries. The estimates were averaged based on purchasing power and questions relating to life satisfaction and well-being. (For this study the amounts are reported in U.S. dollars.)
It’s all downhill after $95,000
Like the Princeton study, the Purdue team also found that once the threshold was reached, further increases in income tended to be associated with reduced life satisfaction and a lower level of well-being.
This may be because money is important for meeting basic needs, purchasing conveniences, and maybe even loan repayments, but to a point. After the optimal point of needs is met, people may be driven by desires such as pursuing more material gains and engaging in social comparisons, which could, ironically, lower well-being.
“At this point, they are asking themselves, ‘Overall, how am I doing?’ and ‘How do I compare to other people?’” Jebb said. “The small decline puts one’s level of well-being closer to individuals who make slightly lower incomes, perhaps due to the costs that come with the highest incomes. These findings speak to a broader issue of money and happiness across cultures. Money is only a part of what really makes us happy, and we’re learning more about the limits of money.”
The takeaway? If you’re not making between $60,000 – $75,000 a year, you’re probably not as happy as you could be. And if you’re making $95,000 a year, you’re probably about as happy as you’re ever going to get.
Or something like that.
Unfortunately, most Canadians fall just short of happiness earning levels. The average Canadian income is $28.94 an hour, or $59,820.80 a year.
Overall, it can be difficult to know how much money we should be earning and whether we’re being fairly compensated. Here’s how to determine your job market value.