How Much Money Does the Average American Need to Be Happy?

Happiness: Pharrell sings about it, you wish for it, and our wallets sometimes fund it.

A well-rounded person defines happiness as being able to experience and afford things, such as vacations, housing, personal development, education, socialization, and health care. So for Americans to be happy — or less emotionally pained — we know we need money not only for survival, but for comfort and the occasional splurge, as well. It’s been said that an annual income $75,000 will do the trick. Nothing more nothing less. An infamous study done by economists at Princeton found that at this rate, people probably have enough expendable cash to do things that make them feel good, like going out with friends or traveling, after meeting their necessary expenses.  But is that really the case?

Can you afford to have your cake and eat it, too, on your current income? Well, that depends on what you prioritize. But one thing is clear: Happiness comes at an annual price — and it’s much higher than you think or what Princeton advertises. As you’ll see, most things on this list are not lavish but reasonable expenses we’d all like to afford for average satisfaction. There are many variables at play that will determine our true “happiness” salary.

Let’s dig into 14 things science says you need to spend money on to be happy, starting with the basic necessities and ending with extracurricular luxuries we all strive for.

1. A nice home

Exterior of small American house

Adequate housing is one of the most important things for happiness. | irina88w

At the core of survival, we must ensure our living expenses are covered. Being able to afford the monthly mortgage bill on your home comes to mind first. It’s recommended to spend about two to three times your annual income on a house. So with a $75,000 salary, you should have a housing budget of about $150,000 to $225,000. But the average loan size for purchase applications is $309,200. And that’s not including energy bills (which in 2015 amounted to a national average of $114) and other utilities, such as cable and internet fees.

Next: Cars can be really expensive.

2. A dependable used car


A used car is a better investment than a new car. | Micah Wright/Autos Cheat Sheet

You must have a vehicle to park in that long, paved driveway, right? Some might think Maseratis and Porsches will make you happier, but that’s not really the case. Buying a fancy, new car — like other depreciating assets — is an unwise financial investment. It’s unlikely cars and boats will ever increase in value. In fact, as they age, they will drastically lose value.

Yet, Americans are willing to shell out over $30,000 on average for a new car loan, making average monthly payments of $503. However, if we buy a used car, that average payment dips to about $376 per month with the average $20,723 used car loan. Much better.

Next: You probably want three meals every day, right?

3. Eating 3 meals a day

young couple visiting eat market

Grocery prices just keep rising. |

Groceries are expensive. Yet putting food in our tummies is essential, so we continue to adhere (and curse inwardly) about rising grocery prices on everyday items. In an all too familiar scenario, we enter the store planning on a $40 bill and walk out with over $100 worth of perishable items, some of which we’ll probably throw away. Americans report spending $151 a week on food, with families making over $75,000 spending $180. Younger adults? They’re keeping up with the trends, too, spending $173 a week on groceries.

Next: Retirement costs a lot because it’s worth it.

4. A solid retirement

Retirement planning written on a notepad

Knowing we have savings for the future helps make us happy. |

Another key to prolonged happiness is making sure our futures are secured. Knowing you have enough money stashed away for retirement makes people less stressed. The average monthly Social Security benefit for retired workers is $1,360. Many people rely on it as their only source of income. Therefore, Americans are forced to make up any difference in spending elsewhere.

The average American has $96,288 in their 401(k). But the average amount for people ages 35 to 54 ranges from $60,528 to $116,192. By our mid-30s, experts recommend we contribute about 10% of our annual incomes to our retirement plans. If we’re sticking with a $75,000 salary, that means we should be saving about $7,500 each year for retirement.

Happiness is not just about essentials. Those who wish to live beyond the basics want to have a higher quality of life. But that comes at a price.

5. Regular doctor visits

a doctor holding a tablet

Regular doctor visits can get pricey. |

Even the healthiest humans need a periodic health evaluation. After all, happiness is most definitively dependent on the ability to live it. Although the price of a doctor visit will vary by state and insured status, insured patients will need about $68 for minor checkups to $234 for complex medical problems. Copays for primary care visits are $15 to $25, and specialist appointments cost $30 to $50.

6. Caring for the ones you love

young children eating at McDonald's

They’re cute until college tuition is brought up. | Kristian Dowling/Getty Images

We must also care for the ones who depend on us. Being able to afford these additional fees can make or break your emotional stability. This could include child care or nursing home expenses for your aging parents down the line. Probably both. Hopefully, you’re lucky enough to have Medicare covering your parent’s costs — for now. But when the Medicare well runs dry, expect a semi-private room in the nursing home to run you an average of $6,844 per month and an assisted-living facility to cost $3,628 per month.

At the very least, children require regular nourishment and clothing. Working parents face yet another substantial annual tariff brought on by their children. Nationally, the average cost for a week at a child care center, for one child, totaled $196, as of 2015. According to a survey, 54% of families said they spent more than 10% of their household income on child care.

7. Sending the kids to school

glass jar full of coins displaying college

Happiness is being able to afford college. |

There’s a reason we see commercials that push opening a college savings fund for toddlers. Higher education is no longer a luxury for some, but an expected expense for all. Parents should expect to pay $33,480 for one school year at a private college, $9,650 for in-state public colleges, and nearly $24,930 for out-of-state public colleges. We all want to provide a better life for our children, but who knows what that number will run 18 years from now.

 8. Making a dent in our debt

woman choose one credit card from many

Don’t go credit crazy. |

There’s nothing like a fat credit bill to crush any good vibes you carried throughout the day. Good financial hygiene means laying a solid foundation — without debt. Expect to budget sizable amounts of cash for inevitable student loan and credit card debts. But with interest rates and increasing medical costs dwarfing our salaries, it’s hard to stay ahead of the curve.

A life of all work and no play? No one wants that. Keep reading for some extracurricular expenses.

9. Personal savings

jar of change

Trying to save money on a tight budget isn’t easy. | Thinkstock

Establishing personal savings is a luxury considering many people have nothing stashed away at all. The average personal-savings rate in the U.S. is 5.5%, including both emergency and retirement funds.

If retirement is too far off for you to consider, think about padding your emergency fund to reduce possible emotional stress. It’s best to keep about two weeks’ worth of pay set aside for sudden emergencies, such as car repairs, injuries, and pet expenses, that can really set you back if unprepared. That means you’ll need about $2,800 saved for emergencies on a $75,000 salary.

But who says we can’t allow for a little day dream every now and then?

10. A weekend getaway


Wanna get away? |

Whether it be a short weekend getaway to a neighboring state or a weeklong international excursion to remote, tropical beaches, Americans who travel are happier and healthier than those who don’t. Unfortunately, lavish luxuries and extended vacations are unaffordable to most of middle America, according to a Statista survey — unless we sacrifice a few of the aforementioned survival basics.

So many of us allow our PTO to go untouched, placing precedence on work responsibilities. But that’s the quickest route to burnout. Vacations don’t always mean breaking the bank. Even small trips can be relaxing — and affordable. The average daily cost of a domestic vacation is $144, including transportation, lodging, food, and entertainment.

11. Weekly dates with friends and family

man and woman on date

Make time for relationships. |

The standard “home, work, grocery store, home” routine gets old fast. Those who inject a bit of relationship management into their daily lives report feeling happier and satisfied. But happiness comes in many forms.

For example, weekly date nights with your significant other — sans kids — or making plans for coffee with friends all skew the happiness meter closer to 10. Some couples might go all out on a fancy dinner for two (spending about $100) or have pizza and wine at home for $25. A coffee at Starbucks will run you just under $5. That doesn’t seem like much. But if you added it all up, it could be hundreds of dollars annually. Still, it’s a reasonable price to pay for overall life contentment.

12. (Free) time to yourself

girl reading a book in bed

Invest in some downtime. |

Don’t panic. Some of the best things in life are (mostly) free. A little downtime is a very effective way to recharge and reboot. Those who can afford to stop and read a book, watch a movie, or go on a lung-clearing hike should always do so. Next time you’re looking for a cheap date or free Sunday afternoon with the family, consider heading to the community park. Renting a $2 movie from Redbox or watching a few episodes of a new Netflix series at home are activities that can lead to greater happiness.

13. A gym membership for health and wellness

Fit young woman box jumping at a gym

Fitness and happiness are closely connected. | Photography

Daily exercise is a surefire way to promote health and wellness. While the debate still exists over whether gym memberships are a good investment, we know for sure pumping iron gives off endorphins that increase feelings of happiness. Just like learning a new skill satisfies your brain, healthy lifestyles satisfy your well-being.

Forget average membership rates of just under $60 per month and CrossFit fanatics, who are willing to fork over hundreds for burpees and box jumps, most of which can be done at home. You can decide how much you want to invest here, but plan on allotting at least a small portion of your paycheck to fitness.

14. Giving to charity

salvation army red kettle

Charity benefits you, too. | Tim Boyle/Getty Images

Giving back does the heart good, researchers say. When we make enough extra money to give to those in need, it promotes a social connection to others. The average American household gave $2,520 to charity in 2015, according to National Philanthropic Trust. But this varies widely with income ratios and only shows reported donations, not unreported random acts of kindness.

Follow Lauren on Twitter @la_hamer.

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