How much you should be earning
MONEY does buy happiness. $159,000, to be exact.
That is the "optimal" salary at which workers in Australia and New Zealand are happy, according to research from Purdue University in the US, based on a Gallup survey of more than 1.7 million people in 164 countries.
The study identified the ideal income points for emotional wellbeing - day-to-day emotions such as feeling happy or excited as opposed to sad or angry - and life satisfaction, defined as an overall assessment of how one is doing typically influenced by higher goals and comparisons to others.
"It's been debated at what point does money no longer change your level of wellbeing," said doctoral student Andrew Jebb, lead author of the study published in the journal Nature Human Behaviour.
"We found that the ideal income point is $US95,000 ($121,000) for life evaluation and $US60,000 ($76,000) to $US75,000 ($95,000) for emotional wellbeing. Again, this amount is for individuals and would likely be higher for families.
"That might be surprising as what we see on TV and what advertisers tell us we need would indicate that there is no ceiling when it comes to how much money is needed for happiness, but we now see there are some thresholds."
Mr Jebb said the findings, which were based on purchasing power and questions relating to life satisfaction and wellbeing, identified substantial variation by country and region, with "satiation" occurring later in wealthier regions for life satisfaction.
"This could be because evaluations tend to be more influenced by the standards by which individuals compare themselves to other people," he said.
In Australia and New Zealand, that "satiation" point for life satisfaction occurred at around US125,000 ($159,000), compared with $US100,000 ($127,000) in Western Europe and Scandinavia, $US105,000 ($133,000) in North America, $US45,000 ($57,000) in Eastern Europe and $US40,000 ($51,000) in sub-Saharan Africa.
According to the Australian Bureau of Statistics, the average full-time salary currently stands at $81,531, meaning most people are roughly in reach of emotional wellbeing but a long way from life satisfaction.
The study found that once the threshold was reached, further increases in income actually made people feel worse, with reduced life satisfaction and a lower level of wellbeing.
The authors speculated that this could be because once people had enough money to meet their basic needs, they may be driven by desires such as pursuing more material gains and engaging in social comparisons, which "could, ironically, lower wellbeing".
"At this point they are asking themselves, 'Overall, how am I doing?' and 'How do I compare to other people?'" Mr Jebb said. "The small decline puts one's level of wellbeing 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."