There is no doubt that having enough money in a person's bank account reduces their stress and improves their overall happiness. According to a recent survey conducted by the financial services company "Empower," 6 out of 10 Americans believe that "money can buy happiness," at a time when studies show a correlation between higher income and greater life satisfaction. When asked how much money is needed to feel happy, American respondents stated that it requires a net worth of about $1.2 million on average, indicating that happiness, in their view, "requires ample money." Millennials say they need a net worth of about $1.7 million to be happy, while Generation X needs about $1.2 million. Baby Boomers similarly indicated that a net worth slightly below a million dollars would make them happy. As for Generation Z, Empower found that among younger adults, a net worth of around $487,000 on average would be sufficient for financial happiness.
About 72% of millennials agree that money can buy happiness, more than any other generation. They are also the generation that cites the highest annual salaries they need to be happy, more than four times higher than any other generation's figure. The average salary each generation claims they need to be happy and less stressed, according to Empower, is as follows:
- Generation Z: $128,084
- Millennials: $525,947
- Generation X: $130,344
- Baby Boomers: $124,165
Participants indicated that the average annual income that would make them less stressed is $95,000. Currently, they receive an average salary of $65,000, which means they would need an increase of about 50% to reach that level. Empower found that improving people's lives does not require a lot of money, relatively speaking. A one-time boost of $25,000 would increase financial happiness for Americans by 42% for six months. Additionally, a surprise gain of $15,000 would have the same effect for 32% of participants, and 17% would be happier with a $5,000 bonus.
Although they state they need a high salary or a very high net worth to feel happy, these factors themselves are not what makes most Americans happy. Instead, paying all their bills on time and in full is what determines financial happiness for 67% of Americans, according to the survey. Only 17% of participants indicated that reaching a certain net worth means they are financially happy. Additionally, being debt-free and enjoying small daily luxuries are the other two most common ways Americans say they can be financially happy.
