I think this is a hard one to discuss without a definition of happiness. Sure, it makes me happy to be able to be able to have nice things and travel comfortably. I would love be debt free and save more for retirement. But would those things actually make my life happier on a day to day basis, or would they just be NICE?
For example, I went on a kick ass trip to Europe last year. It was a budget tour and I flew coach. If I had had more money, I would have went on a nicer tour and probably slept in better accommodations and included meals would have been higher quality. But that's not the stuff I remember when I think back on that trip fondly - I think of the places I saw and the food I ate in cafes and restaurants and the friends I made. I really don't think my overall happiness in relation to travel would have been any higher if I had more money. That travel absolutely contributed to my happiness in life, and I can do that kind of thing on my income (less than the ideal in my state).
I think the numbers in the article are more "the amount of money you need not to be stressed out about money and be able to do most of the things you want to do". Within reason. I think the 70k figure quoted for Iowa is probably accurate, especially in most of the state where COL is much lower than where I live. I don't worry about paying my bills, I can usually do things I want to do (attend local concerts, go out for drinks with friends, whatever), and I have everything I need. Would it be nice to be able to shop whenever the mood strikes and pay off my debt. Absolutely. Would it make me "happier"? Probably not.
That's me. We've made varying amounts North of $75k, but may not "Mo Money" money, ha!
Instead, this week for example, I don't bat an eye when DH likes the frames that at $100 more than another pair or when my prescription co-pay is $260.
I do tend to believe we aren't actually all that self-aware and am probably not susbstantially happier than I was at HHI of $75k.
I'll be honest, I don't think it's very accurate. I've lived in Old Town Alexandria, VA and in NYC and now a NJ bedroom community.
I think NY is more expensive than DC. I've never lived in DC, but worked there and go back frequently.
Plus add in two kids and I don't think, it's accurate for a household, especially considering households tend to have children, especially in HCOL area.
We make more than the level of happiness and every raise DH gets adds to our happiness as it open more opportunities through saving for retirement/college, travel opportunities, or general less stress.
Looking at the numbers, I think there is a proportionality that also needs to be considered. NY isn't just NYC but also Albany and Buffalo, which have significantly lower COL. Alexandria is higher than eastern VA farming communities as well. DC is strictly DC without extra acreage to balance out its need/want for higher income. I'd be significantly happier in Spokane with $75,000/year than I would be in Seattle with the same income.
That's completely true and I'm actually from NYS between your two examples. When I think of prices in my hometown, I agree with the level of happiness ratio. However, this is where I don't think these types of studies are accurate or effective. There was a NYT/WSJ article a while back (can't recall which publication) that review the COL in NYC vs the rest of the country. It was something like $125K is the equivalent of $75k in buying power elsewhere. Not to true this into a HCOL vs LOC debate that MM loves, but I just don't think it is that accurate.
I agree that although our income has jumped significantly in the last eight years, about 3x higher, my happiness hasn't increase three-fold, but my sense of security (increase in savings, retirement) has increased as well as our bills (kids are expensive!). There is a point where more money is just more money and doesn't direct impact happiness, but I've never experienced the more money equals more problems. In fact, for us, more money has always meant more options and more options mean less problems.
I love having way more money than I did about 10 years ago but you know, I don't think I'm any happier. I just have less financial stress.
However I was also in university then and those were the best days of my life in many ways. I don't know that income has anything to do with it.
But this is really the key point of the article - does having less financial stress make you happier? It's not about the ability to afford luxuries (at least not for me). It's about the comfort and security of knowing that you can maintain a financially stress-free lifestyle.
For me, having less financial stress = I am happier. And more money is the way to do that. There is certainly a tipping point, but the point exists.
I love having way more money than I did about 10 years ago but you know, I don't think I'm any happier. I just have less financial stress.
However I was also in university then and those were the best days of my life in many ways. I don't know that income has anything to do with it.
But this is really the key point of the article - does having less financial stress make you happier? It's not about the ability to afford luxuries (at least not for me). It's about the comfort and security of knowing that you can maintain a financially stress-free lifestyle.
For me, having less financial stress = I am happier. And more money is the way to do that. There is certainly a tipping point, but the point exists.
While we are objectively more secure now that we earn more (really, now that we've saved more because of our higher earnings--higher incomes are harder to replace than lower ones), I really didn't have financial stress when we earned around $75K just outside Chicago. I did have financial stress when we earned $55K, though much less than when we earned $21K.
I'm not debating that your quality of life seems better with more expensive items, but that doesn't actually mean you are intrinsically happier because you have more money and flew business class. Most people do not come back from a trip and three weeks later, on a random Tuesday, say to themselves, "You know what really makes me happy? The fact that when I went to Spain last month, I flew business class." It is great in the short term, which may be the 10 hours on the flight or even the few days after it, but it generally does absolutely nothing to affect your long term happiness and is probably not something you even consider on a day-to-day basis which is what this article was about. Not once did I think to myself today (or ever), "I am happier today because I am lucky enough to be able to fly business class when I fly."...
OK, first, I do fully agree with your main point here, but I am chuckling just a little bit about the specific example under discussion because the one thing I really wish I had more money for is more comfortable travel. Now, would my overall life be happier if I could afford to fly business class all the time? Probably not. But I do wish quite regularly (many times per month) that I could fly first class (well, I really wish I could fly in a private jet, but I'd settle for first). Part of this is the fact that I have to fly pretty often for work, and even trans-oceanic flights have to be in coach.
I think there is a bit of an element of you stop thinking about it once you have it. I rarely think to myself "I'm so glad I have enough money to pay the utility bill this month" because I'm used to always being able to pay it. But I'm sure if I were just on this side of struggling I'd appreciate it more.
We make more than the level of happiness and every raise DH gets adds to our happiness as it open more opportunities through saving for retirement/college, travel opportunities, or general less stress.
I agree with this. It might be true at some upper level but even where we are now, it's still better for DH to get a bigger bonus than a smaller one, lol. If we suddenly started to make a lot more money, I would probably have another baby and hire a full time nanny to help me with the kids. I guarantee that I would be happier overall
I think this is a hard one to discuss without a definition of happiness. Sure, it makes me happy to be able to be able to have nice things and travel comfortably. I would love be debt free and save more for retirement. But would those things actually make my life happier on a day to day basis, or would they just be NICE?
For example, I went on a kick ass trip to Europe last year. It was a budget tour and I flew coach. If I had had more money, I would have went on a nicer tour and probably slept in better accommodations and included meals would have been higher quality. But that's not the stuff I remember when I think back on that trip fondly - I think of the places I saw and the food I ate in cafes and restaurants and the friends I made. I really don't think my overall happiness in relation to travel would have been any higher if I had more money. That travel absolutely contributed to my happiness in life, and I can do that kind of thing on my income (less than the ideal in my state).
I think the numbers in the article are more "the amount of money you need not to be stressed out about money and be able to do most of the things you want to do". Within reason. I think the 70k figure quoted for Iowa is probably accurate, especially in most of the state where COL is much lower than where I live. I don't worry about paying my bills, I can usually do things I want to do (attend local concerts, go out for drinks with friends, whatever), and I have everything I need. Would it be nice to be able to shop whenever the mood strikes and pay off my debt. Absolutely. Would it make me "happier"? Probably not.
Ok, but there is a big difference between a household of one vs. two or four.
I think this is a hard one to discuss without a definition of happiness. Sure, it makes me happy to be able to be able to have nice things and travel comfortably. I would love be debt free and save more for retirement. But would those things actually make my life happier on a day to day basis, or would they just be NICE?
For example, I went on a kick ass trip to Europe last year. It was a budget tour and I flew coach. If I had had more money, I would have went on a nicer tour and probably slept in better accommodations and included meals would have been higher quality. But that's not the stuff I remember when I think back on that trip fondly - I think of the places I saw and the food I ate in cafes and restaurants and the friends I made. I really don't think my overall happiness in relation to travel would have been any higher if I had more money. That travel absolutely contributed to my happiness in life, and I can do that kind of thing on my income (less than the ideal in my state).
I think the numbers in the article are more "the amount of money you need not to be stressed out about money and be able to do most of the things you want to do". Within reason. I think the 70k figure quoted for Iowa is probably accurate, especially in most of the state where COL is much lower than where I live. I don't worry about paying my bills, I can usually do things I want to do (attend local concerts, go out for drinks with friends, whatever), and I have everything I need. Would it be nice to be able to shop whenever the mood strikes and pay off my debt. Absolutely. Would it make me "happier"? Probably not.
Ok, but there is a big difference between a household of one vs. two or four.
True. I did find it annoying that the article didn't really specify how many people should be living on that income. I was assuming 2 adults.
Including my BF our HHI is around the 70k stated in the article (since he's a student) and my answer still stands. I guess it would have been harder to afford the trip to Europe for 2 people, but we manage to live comfortably and without feeling deprived of anything we want/need. I do think we'd need either more income or less debt if we wanted to take regular international trips, though.
The number of people in a household definitely makes a huge difference. When we were engaged and living in a much higher COL area than we are now, DH and I made ~$65k combined. We were happy, had little financial stress, and still had the ability to do some fun stuff (including a great three week trip to Europe on the cheap). Now, as a family of five, that same income would not allow us to save enough for college for three kids, let alone pay for much of anything in the way of activities, travel, or other extras. While I don't think having more luxury goods or more luxurious travel would make me empirically happier, I do think knowing I am providing my kids with educational and cultural opportunities is important to my happiness, as is the security of knowing we have emergency and retirement savings and the ability to pay our bills without stress.
I actually don't doubt that there is a point at which more money doesn't mean more happiness in the long term. I just think the numbers here are pretty far south of where I would put that number for our family.
I also think starting point makes a difference. A lot of the people posting make substantially more than the "happiness number" now. It stands to reason that suddenly making a 1/2 or 1/4 of what you do now would have a negative impact on happiness, at least in the short-term, which is the perspective a lot of people here are coming from. But I can buy that people who have never had a HHI of more than $75k-100k are just as happy on average as those with higher HHI.
Post by wanderlustmom on Jul 20, 2014 20:25:11 GMT -5
I completely agree with the article. Of course it's all anecdotal, but when I was in graduate school and working as a waitress to pay a water bill due the next day, I was happy. I knew I had food to eat and the bills would get paid. When DH and I married and made about half of what we do now--I was happy. Like many posters said, time is the biggest commodity--DH and I did the best we could to do a job we care about, for the least amount of hours possible to make money to be financially comfortable. Our income increasing adds financial security but not happiness. And if a salary increase came with more hours or stress--we wouldn't take it. Our relationships, taking care of our children and being grateful make us happy. For me when I feel happy, I feel expansive and buoyant--content with what I have and excited for whatever moment I am in and thrilled for the future. That has never depended on an income increasing since I already had my basic needs met. Sleeping in a higher thread count sheet, drinking a 20 bottle of wine over a 10 dollar bottle, an expensive purse, eating at a 4 star restaurant over a 3 star--these just seem like details. Yes, if I knew we didn't have the money to drink any wine over the week or if we struggled to pay the bills--I would be unhappy.
As an aside, I don't prefer first class. I would rather hold your baby and talk with the people around me than sprawl out in first class. I'm sure people talk in first class too--but it seemed like the few times I've flown it more people talk in coach because the first class cabin is on their devices. I can order a drink for $7--that's about all I could handle in first class anyway. I just don't see what the big deal is unless maybe like DH, you are over 6 feet.
But to the point of the article, I think psychology research has it right. I grew up in a very middle class area and now live in an upper middle class area--people seem no happier overall.
Post by nonsenseabound on Jul 20, 2014 21:54:47 GMT -5
People should watch the documentary Happy. It's on netflix and prime. Totally explains how our socioeconomic circumstances only account for ten percent of our happiness.
People are always telling my dh and I that we are happy people. I realized that the documentary really explained some of that well.
Idk @sfgal530. If we were only making 75k a year or so we probably wouldn't be saving for college (because you're right - how could you make that work mathematically?) But I know that I would be stressed and bothered by that fact, which would likely reduce my overall happiness level. The basic theory is probably right but the numbers the numbers involved are probably different for people with children.
If you're above the level, of course you can't imagine being happy going down to it. But living on very little right now I can tell you we would be deliriously happy going up to it. I definitely agree with the premise. The more money you have, the more you acquire and then the more you need to keep it or get more. When you get off that treadmill for a while you realize you don't 'need' nearly as much crap. When I had more money I didn't feel like I had more problems, but I also didn't feel like I had lots of money or an especially easy life. Now that we make half what we used to I can't believe what we used to piss it away on.
Idk @sfgal530. If we were only making 75k a year or so we probably wouldn't be saving for college (because you're right - how could you make that work mathematically?) But I know that I would be stressed and bothered by that fact, which would likely reduce my overall happiness level. The basic theory is probably right but the numbers the numbers involved are probably different for people with children.
But that is where starting point matters. I agree with you--not paying for my kids' college educations would bother me. But we have always operated under the assumption that we would pay for it. Our parents paid for us to go to college. It stands to reason that not meeting an expectation for my kids that I always intended to meet and providing them with less than my parents gave me might bother me. But I get that my perspective on that is coming from a position of privilege. As @sfgal530 pointed out, most people never have that expectation to begin with and therefore not meeting it does not negatively impact their happiness.
I also think that while I am inclined to say not being able to afford XYZ would affect my happiness, I am probably wrong over the long term. I might be unhappy in the short term, and it might be a source of stress, but I think long term happiness probably transcends all that. I once read that our happiness level is pretty much what it is, to the point that people who lose a limb report being just as happy a year later as they were before. I think it is possible that happiness is more resilient than we give it credit for.
I will say that I would be happier with less stuff. H has been nesting furiously in preparation for Baby Peppers, and it actually stresses me out to have to assess every item we own and figure out how to get rid of things that don't make the cut. We've made a lot of trips to Goodwill.
Idk @sfgal530. If we were only making 75k a year or so we probably wouldn't be saving for college (because you're right - how could you make that work mathematically?) But I know that I would be stressed and bothered by that fact, which would likely reduce my overall happiness level. The basic theory is probably right but the numbers the numbers involved are probably different for people with children.
But if you were only making $75k and it was a long-term situation (as in, you would be making that for the foreseeable future without expectation of a big increase), you would be adjusting your lives accordingly. You probably wouldn't have 3 kids and the expectation of paying for each of their college educations in full, because that is most likely an unreasonable expectation.
I guess my issue with a lot of the points here (in this thread, not directed at you, @lcap) is that people are saying that not meeting certain expectations and luxuries would make them unhappy, which I think is intrinsically not the case for most people. Setting financial and life goals is one thing and it's great to strive for things like first class flights and international travel every year, but if people truly feel as though they will not be happy with life if they don't have these things, that's a different story. The idea that the difference in financial security from $250k/year and $1m/year would be what provides true, actual intrinsic happiness is kind of laughable.
Idk @sfgal530. If we were only making 75k a year or so we probably wouldn't be saving for college (because you're right - how could you make that work mathematically?) But I know that I would be stressed and bothered by that fact, which would likely reduce my overall happiness level. The basic theory is probably right but the numbers the numbers involved are probably different for people with children.
But if you were only making $75k and it was a long-term situation (as in, you would be making that for the foreseeable future without expectation of a big increase), you would be adjusting your lives accordingly. You probably wouldn't have 3 kids and the expectation of paying for each of their college educations in full, because that is most likely an unreasonable expectation.
I guess my issue with a lot of the points here (in this thread, not directed at you, @lcap) is that people are saying that not meeting certain expectations and luxuries would make them unhappy, which I think is intrinsically not the case for most people. Setting financial and life goals is one thing and it's great to strive for things like first class flights and international travel every year, but if people truly feel as though they will not be happy with life if they don't have these things, that's a different story. The idea that the difference in financial security from $250k/year and $1m/year would be what provides true, actual intrinsic happiness is kind of laughable.
I agree.
We we make a little above the point of no return for DC but we pay so much in SLs that it brings us just a little under. We are hardly the picture of MM health. But you know what would make me HAPPY? Really, truly HAPPY? If my H could peace out of his job at this very moment. He is being flat-out emotionally abused, and it's taking a toll on him, me, and us. Having an extra $20k or $30k per year would make me feel less stressed about financial matters, but I don't know that it would make me truly HAPPY.
While my current income might not let me afford all of life's luxuries, it's enough that I can have a nice, comfortable life. From there, what matters most to me is having meaningful relationships, satisfying work, and fulfilling non-work interests. Having more money can facilitate some of that, but we're basically at an income level where happiness has to come from within.
I see what you're saying kadams767. I just think paying for college is a little different from first class flights or expensive cars. My H is into expensive cars and he has one in particular in mind to buy in a few years from now. I go along with it but I know that I could happily live the rest of my life without that car It's unfortunate that today paying for your children's education is an enormous privilege that only wealthier people can afford. Having more than one child, buying a small three bedroom home, or saving money to retire/send your children to college shouldn't be considered these crazy luxuries. I guess that is a slightly different topic though.
Post by thatgirl2478 on Jul 21, 2014 13:36:35 GMT -5
Before I lost my job we made twice as much as that 'threshold'... now we make more than that so we're not destitute - but it SUCKS having to REALLY watch what we spend because we don't have as much $$ as we did before.
I don't know if the extra $$ made us *happier* but it did make life *easier* which made me happier.
But if you were only making $75k and it was a long-term situation (as in, you would be making that for the foreseeable future without expectation of a big increase), you would be adjusting your lives accordingly. You probably wouldn't have 3 kids and the expectation of paying for each of their college educations in full, because that is most likely an unreasonable expectation.
I guess my issue with a lot of the points here (in this thread, not directed at you, @lcap) is that people are saying that not meeting certain expectations and luxuries would make them unhappy, which I think is intrinsically not the case for most people. Setting financial and life goals is one thing and it's great to strive for things like first class flights and international travel every year, but if people truly feel as though they will not be happy with life if they don't have these things, that's a different story. The idea that the difference in financial security from $250k/year and $1m/year would be what provides true, actual intrinsic happiness is kind of laughable.
I agree.
We we make a little above the point of no return for DC but we pay so much in SLs that it brings us just a little under. We are hardly the picture of MM health. But you know what would make me HAPPY? Really, truly HAPPY? If my H could peace out of his job at this very moment. He is being flat-out emotionally abused, and it's taking a toll on him, me, and us. Having an extra $20k or $30k per year would make me feel less stressed about financial matters, but I don't know that it would make me truly HAPPY.
While my current income might not let me afford all of life's luxuries, it's enough that I can have a nice, comfortable life. From there, what matters most to me is having meaningful relationships, satisfying work, and fulfilling non-work interests. Having more money can facilitate some of that, but we're basically at an income level where happiness has to come from within.
People make the mistake of buying bigger houses with bigger costs associated and then have to pay those higher costs forever. They then lease or finance more expensive cars that they have to keep paying for and often have higher maintenance fees. They often live in a more expensive area where people are more likely to be keeping up with the jonses. So there are club fees, activity fees, etc. You are now tied into this lifestyle that must be financed every second of the day. Want to change jobs? Better make at least as much or more. Lose your job? Better find another one quick and it better pay at least as much as the last one. Obviously not everyone does this but it is one fairly common way for mo money to cause mo problems.
People make the mistake of buying bigger houses with bigger costs associated and then have to pay those higher costs forever. They then lease or finance more expensive cars that they have to keep paying for and often have higher maintenance fees. They often live in a more expensive area where people are more likely to be keeping up with the jonses. So there are club fees, activity fees, etc. You are now tied into this lifestyle that must be financed every second of the day. Want to change jobs? Better make at least as much or more. Lose your job? Better find another one quick and it better pay at least as much as the last one. Obviously not everyone does this but it is one fairly common way for mo money to cause mo problems.
I don't consider those things problems, though. Those are just the consequences of crappy choices and/or poor planning not the direct result of having more money.
Are there really people who would turn down extra money just to avoid those kinds of "problems"?
I'll be glad to test their theory if they would like to give me more money. If our HHI was the level for Georgia (with our current expenses) I wouldn't be able to sleep at night. Literally. I would be out slinging pizzas for extra dough.
People make the mistake of buying bigger houses with bigger costs associated and then have to pay those higher costs forever. They then lease or finance more expensive cars that they have to keep paying for and often have higher maintenance fees. They often live in a more expensive area where people are more likely to be keeping up with the jonses. So there are club fees, activity fees, etc. You are now tied into this lifestyle that must be financed every second of the day. Want to change jobs? Better make at least as much or more. Lose your job? Better find another one quick and it better pay at least as much as the last one. Obviously not everyone does this but it is one fairly common way for mo money to cause mo problems.
I don't consider those things problems, though. Those are just the consequences of crappy choices and/or poor planning not the direct result of having more money.
Are there really people who would turn down extra money just to avoid those kinds of "problems"?
I agree. Those are spending problems, not income problems.
People make the mistake of buying bigger houses with bigger costs associated and then have to pay those higher costs forever. They then lease or finance more expensive cars that they have to keep paying for and often have higher maintenance fees. They often live in a more expensive area where people are more likely to be keeping up with the jonses. So there are club fees, activity fees, etc. You are now tied into this lifestyle that must be financed every second of the day. Want to change jobs? Better make at least as much or more. Lose your job? Better find another one quick and it better pay at least as much as the last one. Obviously not everyone does this but it is one fairly common way for mo money to cause mo problems.