Who says money can’t buy happiness? Here’s how much it costs (really) in different cities

Maybe money can buy you happiness, at least some.

That optimistic conclusion comes from a recent study of how much that amount might be in different parts of the world and the U.S. 

A salary of about $105,000, on average, is seen as enough to make people happy in the U.S., although that amount varies depending on where they live, according to S Money, a money exchange service. It used a 2018 Purdue University study that looked at how much money would make people feel satisfied with life. In its new analysis of that data, S Money adjusted that amount by the cost of living in each area and calculated what happiness "costs" in those places. 

Money’s relationship to happiness is regularly examined by scientists from Princeton and Harvard to University of Pennsylvania and more.  

“I’m very curious about it,” said Matthew Killingsworth, a senior fellow at Penn’s Wharton School who studies human happiness and has conducted his own study on this question. “Other scientists are curious about it. Lay people are curious about it. It’s something everyone is navigating all the time.” 

What do studies say about money and happiness? 

Purdue University found the ideal average income for individuals worldwide is $95,000, and $105,000 in the U.S. Beyond that, satisfaction with life deteriorates, it said. At $105,000, the U.S. was ranked 10^th highest price in the world out of 173 countries, S Money said, and above the Census Bureau's $70,784 real median household income in 2021. 

Happiness in Iran, where inflation this year has hovered around 45%, is most expensive at $239,700 and least expensive in Sierra Leone, Africa, at $8,658 per year, S Money said.

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Does the cost of happiness vary among U.S. cities, too? 

Coastal cities tend to cost more to live in, so the amount people need to be happy follows suit, S Money said.

Santa Barbara, California, is where happiness costs the most at $162,721 a year, S Money's analysis said. That’s 85% more than Knoxville, Tennessee's $88,032, which is the lowest amount in the country. 

Check out the full breakdown here of where your city stacks up.

If more money makes us happy, shouldn’t more money make us happier? 

Not necessarily, studies show.  

Harvard researchers said in 2011 that it was not the amount of money you have that makes you happy but how you spend it.  

“Most people don’t know the basic scientific facts about happiness—about what brings it and what sustains it—and so they don’t know how to use their money to acquire it,” Harvard’s study said. The researchers proposed eight ways to get more happiness for your money:

That may be why of the 94% of Americans who spend impulsively, 64% regret their purchases, according to 2,000 people surveyed by budgeting app company YNAB in late June. 

Money accounts for just 2-4% of our happiness, according to former Vassar College instructor and activist Jeff Golden. Golden explores what makes people happy in his book Reclaiming the Sacred. 

The age-old question about money:Can wealth really buy happiness?

What accounts for the rest of our happiness? 

Happiness may not depend so much on how you spend your money but with whom you earn and spend it, experts say. 

“The quality of our social relationships is a strong determinant of our happiness,” Harvard researchers said. “Because of this, almost anything we do to improve our connections with others tends to improve our happiness.” 

Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her atmjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday.