How Much Money Do We Really Need to Be Happy?

Money can buy you a fine dog, but only love can make him wag his tail. Kinky Friedman, singer, humorist, politician, and writer (thank you for the introduction, Steve)

Money and happiness—two words that have launched a thousand debates around dinner tables, boardrooms, and Sunday church potlucks. If you’ve ever thought, “If I could just make a little more, life would be easier,” you’re not exactly wrong. (Although we do have good research that suggests materialists are unhappier, less satisfied with their lives, and suffer higher levels of anxiety, depression, and substance abuse than their peers.)

I don’t usually write about money, but money and happiness have been and continue to be studied.  Sonja Lyubomirsky is one I know about.  I also had a mentor who was also involved with happiness and money studies in various cultures. He studied the science of “enough.”  His work has impacted my own ideas about money and well-being. Then I read a recent article by a financial columnist, Michelle Singletary.  Here are some thoughts and a little data.

A massive Gallup study of 1.5 million Americans found that emotional well-being—calm, joy, less stress—rises with income, but only up to about $70,000 a year (adjusted, of course, depending on where you live and your family size). Beyond that, each extra dollar adds only a sliver of happiness.

Why? Because once our basic needs are covered—food, housing, healthcare, safety—the boost from money shrinks. Psychologists call this “hedonic adaptation.” We quickly get used to new comforts and start looking for the next raise, the next gadget, the next vacation.

And here’s the kicker: If you’re already struggling emotionally, more money often doesn’t change that. If your well-being is shaky, a fatter bank account won’t steady it.

Enter the lottery fantasy. A $1.4 billion jackpot sounds like heaven. Quit the job, pay off debts, send kids to college, buy the lake house. Yet Singletary has chronicled story after story of lottery winners who end up miserable—or worse.

Windfalls come with their own dark clouds: scammers, strained relationships, bad investments, even violence. “Everybody dreams of winning money, but nobody realizes the nightmares that come out of the woodwork,” confessed one lottery winner who lost everything.

Money doesn’t erase human struggles. It only reshuffles them. As Singletary notes, the truly wealthy often aren’t celebrities or jet-setters, but steady folks—teachers, civil servants, everyday workers—who quietly invested in their retirement accounts for decades. Boring, yes. Effective, absolutely.

So if money doesn’t guarantee joy, what does? Lyubomirsky’s research points to how we use it. A few practices stand out:

1. Define Your Enough. Write down what financial security feels like. Not just numbers—peace of mind.

2. Spend on Experiences, Not Just Stuff. A walk with a friend, a shared meal, a family trip will warm your heart longer than another shiny purchase.

3. Resist Comparison. Looking at your neighbor’s new car is a surefire joy-stealer. Gratitude for what you already have builds sturdier happiness. (Yes, people are generally less happy and have lower life satisfaction in societies with high wealth and income disparities. This seems to erode social trust and fair expectations, and hinders the ability to convert national wealth into widespread well-being regardless of overall economic growth. For more on this look at the Easterlin Paradox which questions why increased national wealth does not always lead to increased happiness. Definitely worth taking 3 or so minutes to watch the video. What is usually not known is that income inequality makes us all less happy with our lives, even if we're relatively well-off.)

4. Simplify. Automate your bills, budget simply, reduce clutter. Financial clarity reduces emotional clutter too.

5. Be Generous. Giving—especially when you can directly see the good it brings—creates some of the deepest satisfaction money can buy.

   
   

   

Maybe the question isn’t how much money do I need to be happy? but how do I use what I have in ways that matter?

Singletary warns us against chasing quick wealth. Lyubomirsky reminds us that small nudges in how we manage money can tilt us toward joy. Both point us to the same "orchard" truth: it’s less about the size of the harvest and more about how we share, savor, and steward what grows.

My own mentor shared his research which suggested that money does indeed make people happier, but only a bit after the basic needs are addressed.  After that you get much more of a jolt of happiness out of other happiness interventions like kindness or gratitude and especially investing in a good relationship, a friend, a spouse, a fellow worker, a dog.

So dream, yes. Work hard, yes. But remember: happiness is rarely waiting at the end of a jackpot—it’s cultivated in the everyday choices of enoughness, generosity, gratitude and friendships.

May we have enough to quiet our worries, wisdom to resist comparison, and joy in the everyday riches already in our lives.

How might we journey together to The Good Life by understanding the relationship between money and happiness?

But if you really think a bunch of money will make you happy, Washington's powerball drawing is Saturday - 1.8 billion estimate

I make another postscript which I do with a little dancing around... using a bit of ambiguity to protect the identity so that no family members feel I have besmirched their elders. One of the people in our past was quite bright. Well-educated. Then he was left a quite tidy sum of money. He never pursued a job after that. He divorced and, I am told by his sister, died with a cirrhotic liver (He died 40 years earlier than his sister.).