Money doesn’t buy happiness, the old saying goes, but the standard internet reply follows that with ‘but it’s better to cry in a Lamborghini than a Kia’.
The cynicism of the internet has proven itself once again to be correct, as a new study has found that wellbeing increases with wealth.
That makes complete sense when you think about it, despite all the rhetoric about the pursuit of money being an empty endeavor — even though our entire society is structured around it.
Things that make you happy, fit, and secure, cost money. A house costs money, food costs money, gym memberships cost money, leaving an abusive relationship costs money.
That’s why it’s no surprise to find that people with the financial security not to worry about where their next meal is coming from or whether they’re going to get evicted at the end of the month seem to score higher on wellness reports than those who do.
However, once those basic needs are met, money stops being a predictor for wellness. While earnings up to $100K have been found to be correlated with wellbeing, after that level, it no longer becomes a predicting factor.
This is according to the latest Australian Unity Wellbeing Index report, developed in partnership with Deakin University, that shows that money is strongly linked to people’s wellbeing in households with an income below $100K per annum — but only up to a point.
This is interesting, as it means that money is actually one of the more tangible things we can achieve that will increase our wellbeing — and that there is both a target and a limit to how much we need to earn in order to be able to tick that box off and focus on other things to improve our lives.
The study has found that the three life domains key to a ‘golden triangle of happiness’ are: standard of living (having enough money), achieving at life (having a sense of purpose in life) and personal relationships.
The research notes satisfaction with standard of living proves to be crucial for Australians’ wellbeing, but also shows that achieving in life, or having a sense of purpose is just as important to boost our wellbeing. Both are linked to household income, but money isn’t the only factor.
Dr Kate Lycett, research fellow from the School of Psychology at Deakin University has said that while money does contribute to our wellbeing, “our happiness doesn’t depend on it”.
“The research shows that while our sense of achieving is often strongly linked to employment, for most people a sense of achieving comes from many factors in their life, which can include our occupations, volunteering, caring, or taking time for yourself to enjoy your hobbies and interests,” she said.
Money matters to wellbeing but it matters more to people who don’t have enough. According to the research, someone on a household income of less than $15,000 can increase their happiness by a single percentage point by earning and additional $3,659.
However, people on a household income above $150,000 would need an extra $102,000 to increase their wellbeing by one percentage point. For these households, there may be better ways of spending their time than chasing an income boost.
The tipping point for happiness appears to sit at around $60,000, as people living on a gross household income of less than this typically report lower levels of wellbeing than the national average.
Kieren Perkins, CEO of Australian Unity Bank, a former Australian freestyle swimmer and four-time Olympic medallist, explains:
“The Australian Unity Wellbeing Index research shows that money matters, but only up to a point. Once household income is above $100,000, then your sense of wellbeing isn’t as strongly impacted by earning more money.
“Rather, it’s the relationships you have and the sense of purpose you gain from your personal activities that starts to have a larger influence on your wellbeing.”
“Achieving and finding a sense of purpose in life is something that we can all work toward – it’s a common myth that to find a sense of achievement you need to be all-in on something — whether that be sport, work, a creative pursuit or even your family.
“Whether you’re saving for something big, paying down debt or just putting something away for a rainy day, the same principles apply to our finances as to our other goals. The most important factor is having a clear goal and being sustainable in how you reach it,” says Perkins.
If you’re interested in checking your own wellbeing score, head to Australian Unity to take the survey.