In reality, studies have shown there is a correlation between money and happiness – to a point.
New research suggests that what really has the potential to make us happy is thinking we have more disposable income than those around us.
The new research by SunLife found that people who think they have more money than their peers are 24% happier than those who think they have less.
SunLife found that three quarters of people who think they have more money than their peers are happy or very happy.
In comparison, only 58% of people who earn up to £60,000 are happy or very happy.
The findings were revealed in the annual Cash Happy report, which examines the day to day finances of more than 3,000 UK households.
SunLife found that perceived disposable income affects your happiness more than actual wealth, or in fact any other monetary benchmark.
According to Ian Atkinson at SunLife:
“We’ve all heard the expression ‘Keeping up with the Joneses’.
“Our research shows that not only is it a real phenomenon, it’s the most powerful effect money can have on our happiness.
“People who are high earners but don’t think they have more disposable income than their friends and neighbours are less happy than someone earning less who thinks they have more spare cash each month than their friends and neighbours.
“In short, to be happy it matters less how much you earn – or even what you spend it on – than believing you’ve more spare cash than the people around you.”
However, the Cash Happy report also shows that people who think they have more spare cash than their peers have actually seen the smallest rise in their spare cash compared to last year.
The UK average spare cash per month was £355 last year, and has risen to £441 a month this year, a rise of 24.2%.
Those who think they have more disposable income than their peers experienced a rise of 1.3% on average between 2015 and 2016.
This was compared with a rise of 21.2% for those who think they have the same as their peers and 26.4% for those who believe they have less available cash than their friends or neighbours.
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