I believe something more in detail is left out, and should be considered on income verses happiness.
As a teenager, I should have a broad look out on the rest of my life ahead and see what I can do to make the rest of my life happy and fulfilling. I want to make my happiness distributed out throughout my life, with a diverse portfolio of things that make me happy. Whether it be long term relationships, or a secure financial life, or even a successful career, whatever it takes to have a happy life.
Positive psychology is a interesting topic, which is relatively new and is currently very popular. One thing in particular that I notice researchers are focusing on lately, is how much money does it take to be happy. The studies in general concludes that it peaks around a certain level, and after that it tends to stabilize and is not worthwhile to have a higher income. They often say arguably around 75k a year. Of course, you need the necessary tools for survival, and enough to have a life of flexibility and security, as well as a descent standard of living. On the other hand, you don’t need so much where its only buying you endless material possessions that won’t make you any happier, and only greedy. However, maybe it isn’t so simple.
Though I don’t have any data or studies to back my theory up, I do believe I have one that isn’t too frequently brought up in studies like these. I believe that more specifically, some parts of people’s budgets require higher amounts to reach that happiness peak, verses other parts not so much. For example, someone may only need to spend a little bit each year to reach their maximum amount of happiness in terms of transportation and a safe car, but things like education and health care you need a much higher amount to reach the maximum ROI with your happiness!
You may say that each factor being spent on the income does add up to how much money you make, because each component of how the budget is broken down and how much you need for each amount to reach maximum happiness adds up to a certain income. (Though that might not be a bad way to study this topic and if you did want to find a simple income level…) However, there are more external factors that may affect what level of happiness you reach with certain things, like a nice house or healthcare. I would believe this to most likely be location, specifically the economy and type of government you live in.
Two good examples could be Norway verses the United States. In Norway, you won’t need to spend nearly as much in healthcare and education, since the government gives it to you. (Maybe some things left out in these studies is how much the government gives to their citizens, and how much money this is valued at.) However of course, in Norway housing in general is way more expensive, and you may need to spend a lot more of that aspect of your budget to reach the peak of happiness for that factor. In the U.S, you won’t get many generous benefits on health care and even welfare and public assistance for a safety net, but certain things may be cheaper such as housing, or goods at grocery stores such as food. Also, the taxes are very different in these two societies, and what is tax deductible as well, which could lead to the happiness level of certain factors in how your income is spent. These two examples hopefully paint a bigger picture in general on my theory. Different countries and economies may be a major aspect of my theory on individual factors that you spend on, require more money than other things to reach high happiness levels.
Remember my theory is just a theory, but I do hope that researchers on positive psychology and economists take this idea into consideration, that it’s not about how much you make per se, but rather the different parts of the income reaching different levels of happiness, whether it be transportation, housing, or even savings.