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It’s no secret that having enough money in the bank can help keep your stress low and improve your overall happiness.
Studies have shown that higher incomes are correlated with higher levels of life satisfaction, and Americans themselves tend to agree — 6 in 10 say money can buy happiness, according to a recent survey from Empower, a financial services company.
It doesn’t come cheap, however. When asked how much money it would take to be happy, Americans said it would take a net worth of about $1.2 million, on average.
However, millennials say they’d need a net worth of about $1.7 million to be happy. Gen Xers would need around $1.2 million and baby boomers similarly said a net worth just under $1 million would make them happy.
Gen Z is the real outlier. Among the youngest adult generation, a net worth of about $487,000 on average would be sufficient for financial happiness, Empower found.
The price of happiness is highest for millennials
Some 72% of millennials agree that money can buy happiness, more than any other generation. They’re also the generation that lists the highest annual salary they would need to be happy — it’s more than four times higher than every other generation’s number.
Here’s the average salary each generation says they’d need to be happy and less stressed, according to Empower:
- Gen Z: $128,084
- Millennials: $525,947
- Gen X: $130,344
- Baby boomers: $124,165
The median annual income respondents said would make them less stressed is $95,000 a year. They currently earn a median salary of $65,000, meaning they’d need nearly a 50% raise to get there.
Remember, the median is the number in the middle of all responses — half of respondents named a higher number, half named a lower number. On the other hand, a few high or low numbers can skew the average up or down.
Relatively speaking, it wouldn’t take much money to improve peoples’ lives, Empower found. An extra one-time payment of $25,000 would increase 42% of Americans’ financial happiness for six months. A $15,000 windfall would do the same for 32% of respondents, and 17% would be happier with a $5,000 bonus.
What financial happiness looks like
Despite saying they would need to earn a high salary or have an ultra-high net worth to feel happy, those things themselves aren’t what would make most Americans happy.
Rather, having all their bills paid on time and in full defines financial happiness for 67% of Americans, Empower found.
Being debt free, 65%, and enjoying everyday small luxuries, 54%, are the other two most popular ways Americans say they could be financially happy. Just 17% of respondents say reaching a certain net worth would mean they’re financially happy.
In general, most Americans are happy — 75% of people rank their overall happiness at a seven or higher out of 10, Empower found. But finances are an area where Americans’ happiness has the most room to grow.
These are the areas of their lives Americans are most happy with:
- At home: 80%
- With relationships: 72%
- At work: 68%
- With financial goals: 63%
- With plans to get to financial goals: 62%
- With financial freedom: 61%
- With financial allies (mentors, etc.): 58%
- With finances (net worth, etc.): 58%
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