While earning more money can enhance happiness, research from Wharton School psychologist Matt Killingsworth shows that experiences and anticipation play equally important roles in making life more joyful.
- Income generally increases happiness, with different effects across groups.
- Spending on experiences brings more joy than possessions.
- Anticipation of events enhances happiness well before they occur.
What happened
Matt Killingsworth, a Wharton School psychologist, collaborated on significant research projects studying how income relates to happiness. Earlier studies suggested happiness grows with income only up to about $60,000 to $90,000 per year, after which gains plateau. However, Killingsworth’s 2021 study found happiness keeps rising with income without a clear limit.
In 2023, Killingsworth joined forces with previous researchers to reconcile these differing findings. They discovered that for the least happy 20% of people, happiness stops increasing beyond roughly $100,000. For others, especially those already happiest, more income continues to bring more joy—sometimes even more rapidly.
Why it feels good
One explanation for why money affects happiness differently among groups is that it helps reduce hardships and create comfort, but once basic struggles are addressed, extra money has diminishing returns for some. Money can also introduce new complexities despite easing some problems.
Beyond finances, Killingsworth’s research highlights the special role of experiences—such as vacations and social events—in generating greater moment-to-moment and lasting happiness compared to owning material things. Experiences provide richer anticipation and fond memories that possessions generally do not.
What to enjoy or watch next
Consider focusing your resources and attention on experiences that bring joy, such as trips, celebrations, or new adventures, to maximize happiness. Psychologists agree that looking forward to these events can enhance well-being long before they begin.
Experts like Gretchen Rubin suggest deepening happiness by savoring the moment, sharing experiences with others, and reflecting on positive memories afterward. These practices, coupled with meaningful anticipation, create a fuller, richer sense of happiness beyond the paycheck.