How Much Does Happiness Cost Now That Research Shows It Can Be Bought?
Written by
Vance Cariaga
Edited by
Daria Uhlig
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It might not come as a huge surprise that happiness is a very expensive proposition in 2023. For the price that most Americans put on happiness, you could buy more than two average-priced U.S. homes or about six Tesla Roadsters. While money can’t technically “buy” happiness, if you were to put a price tag on it, most Americans would say about $1.2 million, according to a new survey from financial services company Empower.
The online survey of 2,034 American adults, conducted in August and released last month, found that 59% of respondents said $1.2 million could buy happiness. Millennials were especially fond of that dollar figure, with nearly three-quarters (72%) saying $1.2 million was a good round figure to put on happiness.
In terms of what most Americans associate with a “return on financial happiness,” the most popular answers were on-time bill payment (67% of respondents), being debt-free (65%), affording everyday luxuries without worry (54%) and owning a home (45%). More than half of respondents (53%) said you can find contentment in spending on experiences with those they cherish.
As for the $1.2 million figure — that refers to net worth, meaning that the average respondent believes you need a net worth of $1.2 million to tick off all the boxes that contribute to financial happiness. Net worth is your total dollar value of assets minus liabilities.
There’s some good news and bad news about net worth in the United States. The good news is, the median net worth of U.S. households rose by 37% between 2019 and 2022, according to Federal Reserve data cited by The Hill. The bad news is, the median net worth in terms of dollar figures was only $192,900 as of 2022 — or roughly $1 million below what most Americans believe constitutes financial happiness.
But the Empower survey respondents might not be too far off in what they think you need to find financial happiness. The average net worth of U.S. households — which reflects a much bigger impact from the wealthiest Americans — was $1.06 million as of 2022.
The price tag Americans put on financial happiness varies pretty widely between age groups. Gen Z respondents were far and away the ones with the lowest figure, with a desired net worth of $487,711 to achieve financial happiness. On the other end of the spectrum, millennials — many of whom are starting families and buying their first homes — put a price tag of about $1.7 million on financial happiness.
Here are some other highlights:
- Baby boomers: $999,945
- Gen X: $1.21 million
- Overall average: $1.19 million
Because most Americans in those age groups are nowhere near to achieving their desired net worth, many are under financial pressure. The Empower survey found that 73% of Americans are experiencing financial stress.
Among the causes of that stress are inflation (81% of respondents), rising interest rates (66%) and student loan debt (32%). More than half of respondents (54%) said they carry debt, while 36% could not handle an unforeseen expense over $500 without “real worry.”
Americans with a more detailed financial plan are about three times as likely to report greater happiness in money matters, according to Empower. On the bright side, many Americans are taking positive steps to develop financial plans to improve their well-being. Meanwhile, fewer than one in five respondents (17%) said financial contentment is about reaching a certain net worth.
“Every generation has grappled with questions of how to calculate financial happiness: hard work, a lot of planning, consistent savings, and even a little bit of luck, in just the right measures,” Empower President Carol Waddell said in a press release. “A spirit of financial confidence prevails with 7 in 10 saying they have clear financial goals and Americans continue to envision a bright future.”
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