More Money Makes Basically Everyone Happier — With One Major Exception

The Notorious B.I.G. got it wrong — mo money does not mean mo problems. In fact, more money tends to make people happier without limit, unless they’re unhappy to begin with, according to a new study. Because money truly cannot solve all your problems.

That correlation between income and mental well-being only became apparent recently. In 2010, research from Princeton University showed that emotional well-being increases with income, but only to a certain point. Somewhere around a salary of $75,000 a year, that happiness appeared to plateau.

Yet in 2021, another study from the University of Pennsylvania found that happiness levels continued to rise with income over $100,000 annually, without leveling off. “If you're rich and miserable, more money won’t help,” Matthew Killingsworth, Ph.D., a happiness researcher and co-author of the 2021 study, said in a press release. “For everyone else, more money was associated with higher happiness to somewhat varying degrees.”

To settle the discrepancy between the two studies, Killingsworth recently teamed up with Daniel Kahneman, Ph.D., who co-authored the conflicting 2010 paper, along with a third party arbiter. After reassessing the data to figure out where they went wrong, the team confirmed that more money typically does improve a person’s overall mental health.

That said, if more money doesn’t boost your psychological state, it could be a sign that you’re starting from a pretty low place already.

The fresh analysis, published in the same journal as the previous two conflicting studies, the Proceedings of the National Academy of Sciences (PNAS), identified one key error in the 2010 study. Similar to how cognitive testing measures for dysfunction rather than mental capacity, that first study didn’t measure happiness; the survey of 1,000 people accidentally accounted for a lack thereof instead. “Once you recognize that, the two seemingly contradictory findings aren’t necessarily incompatible,” Killingsworth concluded.

According to the 2021 dataset, which had a wider range of responses, from 33,391 adults, emotional well-being did indeed level off around $100,000 a year for the unhappiest participants, which was closer to $75,000 in 2010, considering inflation. But it continued to climb with income for everyone who wasn’t miserable.

So if you’re already happy, bringing home more bacon will probably make you happier...but that’s the best case scenario, provided you don’t take on new anxieties with your new money. “Increased income can cause some previously happy people to become unhappy due to the peculiar stresses that often accompany increased wealth,” says clinical psychologist Carla Manly, Ph.D., who was not involved in the study.

Many parents who struggle financially can be happy deep down, but rarely get a chance to express that because they’re in survival mode. If they had more money to meet their basic needs, they would seem happier because they would be less stressed. However, “happy individuals tend to be happy regardless of their income,” Manly says.

In the end, Killingsworth said, “Money is not the secret to happiness,” but instead is “one of the many determinants of happiness.” So if you’re looking to solve all of your problems with money, then you’re just looking for trouble.