YES. Money does buy happiness, But here'show much you need

The age-old saying “money can’t buy happiness” may need a rewrite. According to a groundbreaking study by Nobel Prize-winning economist Daniel Kahneman and Matthew Killingsworth, a senior fellow at the University of Pennsylvania’s Wharton School, income and happiness are deeply connected—and for most people, there’s no upper limit.

Published in the journal PNAS, the study drew on over 450,000 responses from the Gallup-Healthways Well-Being Index, surveying 1,000 U.S. residents daily. It segmented respondents into three groups based on their emotional well-being: the least happy, the moderately happy, and the happiest.

The More Money, The Happier—For Most

Here’s what the researchers found:

Least happy group: Happiness increases with income up to $100,000, then plateaus.
Middle-range group: Happiness grows steadily with income—no cap.
Happiest group: Happiness increases and then accelerates after $100,000.

“For most people, larger incomes are associated with greater happiness,” said Killingsworth.
“The exception is people who are financially well-off but unhappy. For everyone else, more money was associated with higher happiness to somewhat varying degrees.”

Kahneman’s earlier 2010 research had suggested a plateau in happiness after $75,000 in income, while Killingsworth’s 2021 study found happiness rose continuously with income. Their joint effort reconciles these two perspectives.

Beyond the Numbers: Why More Money Helps

While money alone doesn’t guarantee joy, it acts as a powerful buffer against life’s stressors. Financial security can ease burdens like debt, housing insecurity, healthcare access, and education costs—freeing people to focus on what truly matters.

“Money is not the secret to happiness, but it can probably help a bit,” Killingsworth said.

Past research backs this up:

Ed Diener, known as “Dr. Happy,” noted money can protect against life’s low points.
Raj Raghunathan emphasized that feelings of abundance foster happiness.
Sociologist Rachel Sherman found that the wealthy value money for the freedom and autonomy it brings.
A 2017 study revealed that spending money on time-saving services (like hiring help for chores) increases well-being.

Real-World Implications

This research goes beyond theory. It offers insight into how income influences emotional well-being and helps people navigate major life decisions, such as choosing between a passion job or a higher-paying one, or balancing income with lifestyle needs.

Professor Barbara Mellers, one of the co-authors, emphasized that the relationship between money and happiness is nuanced: “There’s no single equation. For the most unhappy, money has limits. But for the rest, it can make a real difference.”

More money generally means more happiness, especially if you’re not already miserable. And if you are—well, more income might help, but it isn’t the cure. Money can’t buy happiness alone, but it sure can fund a more secure, stress-free, and fulfilling life.