Camille Van Vyve
04 Dec 2024
What is the price of happiness in Belgium?
Last May, Easyvest launched a national survey titled "Does money make Belgians happy?" Nearly 1.600 responses were collected from across the country. The results of this survey provide a unique map of the financial aspirations of Belgians.
How Nobel Laureate Daniel Kahneman inspired this survey
It all started with a famous study conducted by Nobel Prize winner Daniel Kahneman (USA) in 2010 and refined in 2023. In his original work, Kahneman highlighted a "financial threshold" for happiness: beyond $85,000 in annual net income for an American household, individual happiness ceased to increase. Is the price of happiness the same in Belgium? How do Belgians relate money to happiness? Our "money and happiness" barometer provides insights into these questions with two unique features: the data is shared open source, and the results can be interpreted in great detail. Interactive tables and maps are freely available on this page. To save you from exploring the data, our main conclusions are outlined below.
€1.000.000 and €5.500 net per month, the price of happiness for Belgian households
Easyvest’s "money and happiness" barometer highlights two key figures: the price of happiness in wealth and the price of happiness in income. These values indicate the absolute wealth level (including real estate net of debt) on the one hand and the net monthly income on the other that corresponds to "financial happiness" for Belgian households. Happiness has a price in Belgium: €1.000.000 in wealth or €5.500 net per month per household, in median values. By comparison, the actual median levels of wealth and income from the survey are €440.600 and €4.460 net per month per household.
Money contributes to happiness
Before focusing on the price of happiness, the first observation is that well-being seems to indeed increase with income level, as shown in the graph below. Although 60% of respondents said that money doesn’t buy happiness, it is clear that the proportion of "rather happy", "happy" and "very happy" respondents rises in higher income categories, while the proportion of "unhappy" and "very unhappy" respondents is greater in lower income categories.
The price of happiness is half as high for women
The median price of happiness for Belgian households is €1.000.000 in wealth and €5.500 in net monthly income. These numbers vary significantly depending on the perspective. For example, the median price of happiness is lower for women, particularly in wealth (€450.000 vs €1.000.000). Additionally, women report being less happy than men in nearly all income categories (except the highest). Is it because money contributes less to their happiness? Or because they are less satisfied with their income and wealth levels than men? This is also reflected in our study, as well as in women's lower satisfaction with financial balance within their couple.
Happiness has different prices across regions
The median price of happiness is proportionally higher in income in Brussels (€6.000 net per month per household) than in Flanders (€5.500) and Wallonia (€5.000), and higher for Dutch-speakers than for French-speakers. However, it is interesting to compare the results by income decile: for instance, the price of happiness in the upper deciles is higher for French-speakers than for Dutch-speakers. At the provincial level, Hainaut has the lowest price of happiness in both income and wealth (€5.000 net per month and €500.000 per household).
Generation Z is apparently less driven by money
When analyzing the price of happiness by age, it appears that Generation Z, born after 2000, places the financial threshold a bit lower than its predecessors. For this young generation, the ideal median income is €5.000 net per month per household, and the ideal wealth is €500.000. Overall, aspirations in terms of wealth seem to decrease with generations, as if the present matters more to young people than the future. However, Generation Z's limited perspective on the cost of living - especially housing and family expenses - could also explain this relative lack of interest.
Financial independence, the foundation of financial happiness
In defining financial happiness, financial independence (33%) and being able to handle any unexpected expense (32%) are top priorities, far ahead of being able to financially care for loved ones (21%) and living impulsively and spontaneously (14%). Over 25% of respondents claim to generate all household income, with these "super contributors" being almost equally men and women, likely due to their smaller household size (average of less than 2). Outside of this specific case of single parents, the higher the household income contribution, the higher the proportion of men in the sample. According to our survey, it is still generally men who contribute the majority of household income.
Inflation is the biggest financial stress factor
While inflation currently seems to be the biggest financial concern for Belgians, the context varies slightly by gender. Men appear more stressed by the geopolitical situation, while women are more concerned about their income level. Conversely, demographic shifts that will increase pension costs and rising interest rates don’t seem to worry Belgians much, at least financially.
More income, but not more effort
An amusing result: in response to "What would reduce your financial stress?", earning more money was the top choice with 40% of responses. But when asked to complete the phrase "To reach your financial goals, you plan to...", "work hard" was not the most popular answer (14%), but rather "save" (40%) and "plan properly" (37%). Dreams versus reality...
Saving for financial happiness
If the goal is to have more money without spending more energy, saving seems to be the best way to achieve financial happiness. According to our survey, the median net wealth of Belgian households is €440.600, and their ideal wealth is €1.000.000. Is it possible to close the €500.000 gap through saving? "I believe it’s achievable for the average household in our study," says Matthieu Remy, CEO of Easyvest. "Let’s take a couple aged 45, earning €4.500 net per month, with existing wealth of €440.000, mainly in real estate. To reach €1 million in wealth by retirement, assuming 2% inflation, they would need to invest €1.200 per month for 20 years. That’s a bit less than 30% of their monthly income: it’s significant, but an acceptable proportion, as long as this amount is invested with a 4% return. If the savings are left in a bank account at 2%, they would need to save €2.400 per month, which is far less likely. In the end, our study conveys a positive message: financial happiness isn’t a chimera! It’s a goal that, on average, can be achieved."
Always more? No, thanks
Last interesting although counter-intuitive conclusion: the threshold of financial happiness does not increase proportionally to the level of income. In fact, between the lowest income category (€10.000€/month), while incomes are multiplied by 5 or more, the price of median happiness in income increases from €5.000 net per month per household at...€8.000 net per month. Proof that we do not necessarily want “always more” and that there is a real consensus in Belgium on the “ideal” income level. As the chart below shows, it's only in the highest income category and the 95th percentile that we see a truly clear gap in financial expectations. We cannot therefore say that there is a multiplier effect of income on the price of happiness, neither in income nor in capital for that matter... And that is rather good news.
Deciles and percentiles: definitions
In an ordered distribution of salaries, deciles are values that divide the distribution into 10 equal parts. For example:
- the first decile (usually denoted D1) is the salary above which 90% of salaries are found
- the ninth decile (usually denoted D9) is the salary above which 10% of salaries are found
Similarly, percentiles are values that divide a distribution into 100 equal parts. For the distribution of happiness prices:
- the 50th percentile, also called the median, is the value below and above which 50% of responses lie
- the 75th percentile is the value above which 25% of responses lie
About the survey
The survey "Does money make Belgians happy?" was conducted by Easyvest between April and June 2024 on a national scale. Nearly 1,600 responses were collected, with a representative distribution of men and women, as well as French and Dutch speakers. The main metrics - happiness prices in wealth and income - are expressed in median values to avoid a strong impact from extremes. The survey's confidence interval is 95%, with a maximum margin of error of 5%. This means that if the survey were repeated, 95% of the time, responses would fall within -5% and +5% of the values obtained here. These values are considered acceptable in opinion surveys like this one.