What makes you feel happy? Perhaps it’s family, friends, eating right, exercising and enjoying your time at work and at play.
But what about money? How much do you need to make you happy? Can saving it actually make you happier than spending it?
This past October, Ally Bank conducted a survey of 1,025 American adults, ages 25, and up, to learn more about the role that money plays in shaping people’s overall sense of well-being. The results offered compelling evidence linking the amount of money people have in savings to how happy they feel.
If you already have a savings plan, you might be surprised to learn how significant its effect can be on your well-being. If you don’t have a savings plan – and 53 percent of those surveyed didn’t – these insights may inspire you to consider developing one.
We published our survey’s key findings in a series of infographics. Below, we discuss the results in greater detail.
Saving Your Way to Happiness
They say money can’t buy happiness. While this may be true, our survey shows that saving money can impact our sense of well-being. In fact, among those with a savings account, 38 percent report feeling extremely, or very happy, versus 29 percent of those without a savings account.
Here’s more good news for savers: The more you save, the more likely you are to be happy. Here’s the breakdown of the percent of people who felt extremely or very happy according to the amount they have in savings:
- 57 percent who have $100,000 or more in savings
- 42 percent who have $20,000 to $100,000 in savings
- 34 percent had have less than $20,000 in savings
- 29 percent who have no savings
The connection between the size of your savings account and your level of happiness may seem obvious. But here’s something that may surprise you: Saving money actually affects happiness more than how much you earn, according to our survey. Here’s the breakdown of the percent of people who felt very or extremely happy according to their income bracket:
- 45 percent who earn $150,000+
- 48 percent who earn $100,000 to $150,000
- 43 percent who earn $75,000 to $100,000
- 40 percent who earn $50,000 to $75,000
- 25 percent who earn $25,000 to $50,000
This data shows that the impact that household income has on happiness plateaus at $50,000. On the other hand, the effect savings has on happiness continues to grow as savings accumulate. In other words, a big savings account may contribute to happiness more than a big paycheck.
Why is Saving Important?
If you have a savings plan, you probably know the feeling. You check your account, see your savings growing and feel good. But have you ever asked yourself why? According to those surveyed:
- 90 percent say saving helps them face the unknown.
- 90 percent say saving gives them peace of mind.
- 87 percent say saving makes them feel proud.
- 82 percent say saving lets them be independent.
What may come as a surprise, though, is that 84 percent of people surveyed say having money in the bank contributes to their overall sense of well-being – more so than eating healthy foods, having an enjoyable job or getting regular exercise.
The takeaway? Saving money may actually impact your happiness more than you think.
To Save at All Costs?
So, should you forgo spending money and devote your life to saving? Of course not. Our survey shows that some activities contribute more to well-being than saving does. For instance: Of those surveyed, 91 percent say having good relationships with friends and family is more important to their overall sense of well-being than saving is.
On the other hand, 69 percent say they would forgo eating out to save; 42 percent would sacrifice home improvement projects; and – here’s one that may surprise you – 58 percent say they’d give up a vacation to save money.
What surprised you most about our survey results? What surprised you least?