Here’s a graphic of how much additional income Americans say that they would need to “feel happy and less stressed”, as compared to their current annual salary. Taken from this Axios newsletter and data from this Empower survey.
On average, those with annual incomes of $150,000 or less said they would need ~$20,000 more per year. At annual incomes of over $150,000, folks started needing a lot more, both in percentage and absolute terms. That’s just how us humans seem to be wired. We quickly grow accustomed to our current situation, and imagine how nice an extra $1,500 per month would be.
But here’s a different perspective. If you make $80k, you think you’ll need $100k to be happy. If you make $100k, you think you’ll need $120k to be happy. But this also means, if you make $100k, you’re already at the happy point for someone making $80k.
In other words, someone out there is getting through life reasonably fine with 60% or 80% of your salary, while also daydreaming about how nice it would be to have 100% of your salary. That other person is also spending closer to 60% or 80% of your salary, even if only because they have no other choice and are confined by their income.
Why couldn’t you spend like them? Taking your monthly rent or mortgage. It could be higher, or lower, and someone is living in each of those homes that represent 20% less or 20% more than you are paying now. Take your transportation costs. How would a car that costs 20% more or less change your level of life satisfaction?
Don’t just wish for more money, examine the money that you already have from the perspective of someone who is wishing to be you. Now you already have the extra money. Would that money be better spend put aside and buying more income-producing assets? Would that money be better spent on improving your skills and career prospects? Or would it be better on moving to a more expensive home that reduces your commute time so you can have less stress and more quality time with your family?
The Best Credit Card Bonus Offers – March 2024
Big List of Free Stocks from Brokerage Apps
Best Interest Rates on Cash - March 2024
Free Credit Scores x 3 + Free Credit Monitoring
Best No Fee 0% APR Balance Transfer Offers
Little-Known Cellular Data Plans That Can Save Big Money
How To Haggle Your Cable or Direct TV Bill
Big List of Free Consumer Data Reports (Credit, Rent, Work)
I generally like your posts but this one seems dumb mainly because I don’t relate to this survey at all. According to your link only 2k people were surveyed and they don’t list the demographic distribution. Additionally like all surveys they are extremely dependent on how honestly the recipient answers the question.
For example if your boss came to you and said “hey you don’t look happy, I really want to make you happy how much more money do you need?” I think most of us would feel guilty asking for more than double our salary regardless of what we make. I’m sure the survey would have the same problem, people dont want to sound greedy.
It takes a special type of person to have a real grasp on their finances, spending habits, and market prices to really answer that question with any kind of accuracy. Otherwise you’re just guessing and people want to see themselves as good.
Personally I make slightly more than 150k a year and I’ve reach the point where more money isn’t going to make me happier without a huge jump in income. Such as the difference between being able to afford a coach vs first class ticket. I’m pretty content with what I have, such that even doubling my salary would actually make me more stressed that I need to do more to justify my salary.
I do agree that regardless of the survey results it’s a good reminder to look at what you have and be thankful for. People always have it both worse and better than you, and looking at your life from a different perspective is a good exercise.
Love this post! I read in a book about who is the richest person in the world? It is the person with a satisfied mind.