Saving Statistics: how much money is the average American saving?
Dig into the statistics on saving money to learn how much the average American is saving and how they go about it.
Highlights
6 out of 10 Americans believe money can buy happiness.
The average price tag for financial happiness is estimated to be $1.2 million.
Medium and high-income individuals report higher life satisfaction compared to those earning less.
73% of Americans consider their finances the primary source of stress in their lives.
Statistics on money and happiness
Money and happiness statistics clearly show how the two are interlinked.
New research shows that six out of ten Americans believe in the transformative power of money, with 72% of Millennials and 67% of Gen Z leading the charge.
Interestingly, the average person puts a price tag of $1.2 million on financial contentment.
People from medium and high-income groups worldwide report higher happiness and life satisfaction levels, challenging the notion that wealth and happiness are mutually exclusive.
New research refutes the conventional belief that experienced well-being doesn't increase beyond incomes of $75,000 per year. Based on over one million real-time reports of experienced well-being from a large US sample, the study indicated a linear rise in well-being with an increase in income. The findings suggest that higher incomes may continue to enhance day-to-day well-being, debunking the idea of a well-being plateau for many people in wealthy countries.
Why do people think money can buy happiness?
A comprehensive study by Harvard Business School delved into the psyches of people who believe in the happiness-wealth nexus and provided more proof that money can buy happiness (or a life with less stress).
The diary-keeping experiment involving 522 participants across various income brackets revealed that money doesn't necessarily shield people from life's daily frustrations, but it does significantly reduce the negative intensity of these experiences.
The study also found that people with ample financial resources feel more agency to deal with whatever hassles may arise, leading to a perception of increased control over life circumstances. This heightened sense of control translates into higher overall life satisfaction, demonstrating a clear link between financial well-being and a positive outlook on life.
In a parallel vein, a recent Capital One CreditWise survey indicated that a staggering 73% of Americans rank their finances as the No. 1 stress in life. The survey also gleaned the following insights:
Gen Z’ers (82%) and millennials (81%) were more stressed about their finances than their older counterparts.
42% said they expect to be better off financially in a year from now.
62% were stressed about their money in terms of buying a house, and 61% were stressed because of a car purchase.
These findings underline money's profound impact on our well-being, emphasizing the need for a closer examination of its role in our lives.
The stress associated with financial concerns further solidifies the belief that monetary stability is integral to overall happiness. However, this raises the question: can money buy happiness, or is it the perceived control and security it provides that contributes to happiness?
When does money stop buying happiness?
While some argue money knows no bounds in influencing happiness, research suggests a more nuanced perspective on the relationship between money and happiness.
Contrary to the belief that higher incomes guarantee perpetual joy, earlier studies indicate a saturation point at around $75,000/year.
Beyond this threshold, increases in income improve life evaluation but seem to diminish emotional well-being after a certain point.
For 85 years, the Harvard Study of Adult Development has tracked the lives of hundreds of Americans.
Astonishingly, the most consistent finding that has emerged is that the key to sustained happiness lies beyond material wealth – positive relationships keep us happier and healthier and help us live longer.
Beyond a certain income level, the pursuit of happiness shifts from financial achievements to fostering meaningful connections with others.
It becomes evident that money can’t buy happiness all on its own, and genuine and fulfilling relationships contribute significantly to a person's well-being.
The shrinking returns of increased income on emotional well-being underline the importance of prioritizing aspects of life that extend beyond financial success.
Get expert financial advice
As people navigate the complexities of their financial lives, the quest for happiness often intersects with the pursuit of financial stability. The belief that money can buy happiness stems from a multifaceted understanding of how financial resources influence our ability to meet basic needs and cope with life’s challenges.
Seeking expert financial advice becomes paramount in this journey, ensuring a holistic approach to both your financial and emotional well-being. Whether you're aiming for that $1.2 million or seeking a better understanding of your financial situation, a qualified financial advisor can help.
Let Unbiased match you with an SEC-regulated financial advisor who can give you the advice you need to manage your money successfully and make informed, strategic decisions about your financial future.
Writers
Our team of writers, who have decades of experience writing about personal finance, including investing and retirement, are here to help you find out what you must know about life’s biggest financial decisions.