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Here's a random question that is always a fun discussion: how much money do you think you need to be happy? Do you agree that there may be an “optimal” income for happiness in that your problems increase if you make more? (We haven't talked about how we all define “rich” for quite a while…)
I've always heard $75,000 is the “optimal” number, but according to a recent(ish) story in Fast Company the amount is now $105,000 for Americans, and beyond that, “there's a point at which more money has decreasing returns in terms of our emotional well-being and life satisfaction.”
It's an interesting point, and readers I'd love to hear from you — if you've made different salaries, did you notice increasing stress or happiness as the numbers moved up or down? To what degree “does money buy happiness” for you, either in terms of enabling hobbies or lifestyle habits (like eating out often) or in terms of enabling outsourcing (so, for example, someone else scrubs your toilets).
To what extent does “mo money mo problems” ring true to you — either in terms of increased expectations or stress at work, keeping up with the Joneses or other issues?
Stock photo via Stencil.
Anon
I find these types of studies misleading/frustrating. The number depends greatly on where you live. 105k in New York or San Francisco doesn’t go far at all but would set you up for a very nice life in many parts of the country.
Number aside, I do agree that there are diminishing returns once you hit a certain point.
Anon
Yeah, it’s obviously very tied to cost of living. We have a HHI of $150k in a very LCOL area, and I don’t think more money would make me happier. We have a beautiful home, we can pay for the best childcare, we travel a lot and we enjoy lots of smaller luxuries that add to our QOL like a cleaning service. More money would pretty much all just go in the bank, which would give us more financial security but I don’t think it would affect our day-to-day happiness much. However, if I lived in SF, then obviously more money would get us a lot of things we wouldn’t otherwise have be able to afford on our salaries (like a house!).
Anon
When I (as a singleton) could afford a comfortable 2 bedroom in the D.C. suburbs, could buy a new (J.Crew Factory/ Loft) outfit every now and again, and could pay my loans – all without freaking out about my bank account balance every 4 hours. For me, that came at $130k.
Ellen
I never had a fixed dollar amount associated with being happy. All I know is that I have to have enough to:
1)pay the rent, 2) buy clotheing; 3) buy food; 4) save for retirement; and 5) save for my family (including children and house and 6) save for incidental expenses.
In some places, it’s more costly then others, so if I lived in DC, it would be less, and more in NYC. Dad pays all the bills so he knows I am doing the right thing, and if I stray, he rains me in. I hope the HIVE does not vote for anyone who would upset the plans we all have for retirement. We must all work hard, save and plan for the future. Otherwise we will not have a happy home and retirement. YAY!!
Me too
To me, I make the ideal amount right now — around 160K. I could probably be fine with less but would want at least a 6 figure salary. When I made much more in BigLaw, it came with boat loads of stress and wasn’t worth it. With my current salary, I have a very challenging yet manageable job where I rarely work nights or weekends, and can spend time with my family.
With that said, my husband makes more than double what I do and i recognize that his job is what allows us a lot of luxuries we couldn’t otherwise afford on just my gov’t salary in our VHCOL area.
Anonymous
What job do you have!? I need it!
OP
Appellate attorney in the federal gov’t. But many fed gov’t jobs are like this, good pay and decent hours.
Anonymous
What type of appeals do you do? I am an appellate attorney in state government and will never make that much in my state system, but I LOVE appellate work.
e
the number is certainly dependent on where you live but i’m making $109k, my husband is in the $80s, we have no kids and rent in the Chicago suburbs and we’re very financially comfortable.
Apathy and Depression Reading
Can anyone recommend reading on apathy? My husband is extremely apathetic and it is causing a crisis in our lives. I suspect he is depressed but he denies this. I would like to know more but google isn’t turning up very much. Thanks!
anon0220
I’m not sure if this is what you mean, but I think it’s a not-totally-healthy American expectation to feel ‘happy’ all the time. Chasing that happy high gets so many people into trouble. It’s totally ok to feel apathy mostly or even sad at times.
OP
The issue isn’t sadness, it is true and acute apathy. He is incapable of completing even minor basic tasks and just doesn’t care about anything. He shrugs it off as another thing that doesn’t matter but nothing matters to him and unfortunately, we have a household to run and kids to raise. Neither one of us are preoccupied with being happy.
anon
This sounds like depression.
January
This really sounds like depression. I know your husband says it’s not that, but if he’s apathetic to the point of not functioning, I think you have a medical issue on your hands.
AnonTechie
Is it though? I ask because my husband is like this for 80% of stuff that i care about (groceries, stocking toilet paper, laundry, cleaning, cooking, general household stuff) but seems to be very happy to shop for “Fun stuff” ,pay the rent and generally handle “errands” that is either enjoyable or can be done quickly and online.
OP
Thanks to all who replied. Doing some reading now.
shanananan
I think the important question is is this new behavior or is this how he’s always been, but know you have children/more responsibilities and his apathy is affecting more than just himself. That kind of determines how to direct you.
Anon
Google the word “anhedonia” as a depression symptom. It generally means the inability to experience joy/have feelings and is the medical term for what you’re describing.
Anonymous
Think low dopamine depression, not low serotonin depression. (Insofar as the neurotransmitter theory of depression is valid, anyway.) The kind of thing they treat with Wellbutrin. Those might be some more helpful keywords for research in addition to anhedonia.
Anon
Anons at 3:11 and 4:11 have great advice. How long has this been going on? As someone with year-round depression, the apathy tends to get worse in the winter, probably because of seasonal affective depression (SAD).
Anon
I make way, way less than 100k and I promise I still somehow manage to be happy.
Anon
Yup, cleared less than half of that $105k, & am content.
Anon
Same
Northwest Islander
Agree this is location dependent.
I cleared less than $25k when I was first out of college. I felt flush because I was living in a very LCOL town with a lovely roommate to share expenses.
Now I clear more than 10x that amount, but my standard of living hasn’t gone up much because I am living in a very HCOL city and ditched the roommate in my 30s.
And BTW, my big current salary buys LESS than what my cop grandpa and part-time librarian grandma could afford on their salaries. Lovely house on Long Island, a summer cottage in the Hamptons one block from the beach, and their kids had horses.
anon0220
2 income+ 1 kid family in a hcol area- $280 hhi… it’s enough to cover very comfortable costs and max out tax advantaged retirement, but not enough to fee like we are getting ahead over time. A few years ago we were DINKs making about $350k hhi and felt like we had so much more breathing room and were able to create a great nest egg (which is the only reason I’m not totally stressed about money).
anon0220
I’m happy either way— and feel privileged— it’s more about feeling secure if something were to happen to one of our jobs/us and preparing for the inevitable future. Which I got insurance for this year as well just to cover all bases.
Anon
I think happiness is not tied to making more money, especially for those comfortably in upper middle/upper class. I’m in biglaw and have seen several people make the jump to partner and the big pay increase that comes with it. The ones who are happy were happy before and the ones who are stressed/anxious were also that way before.
That said, I think that feeling financially secure can have a big impact on happiness/stress. Not having an emergency fund, living paycheck to paycheck is very stressful. I know people that make 2-3x 105 and live this way and I know people that make a lot less and don’t. So I think it’s less about making a certain amount but about living within your means, having a support system.
Anonymous
+1
Much happier now making 150K than in BigLaw at 300K. There is obviously a minimum threshold that one needs to be comfortable, but after that point, more money does not equal more happiness. In fact, it can often be the opposite.
TL
Agree; its about living within one’s means. When our HHI was <$30k & we were "poor college kids", we were happy. Now our HHI ~$255k, we're happy. We have over 16 months of bills saved up, but have more job stress. We have maxed our 401k's each year. But in general, the more (money) we have, the more we have to look after. This can be a source of stress. Simplifying our life has been the greatest source of happiness, just look at the article's simple, peaceful picture.
Juli
+1
It really is about living within your means, and I agree that there’s a minimum threshold there. If your basic needs are met and you have enough saved not to live paycheck to paycheck, that’s good. After that point, I think it’s about the time/$ balance. I’m short of the $105k mark by >$30k in my high cost of living New England city, but I’m able to pay off my loans, split the rent & utilities with my SO on a 1 bed apartment, and save a substantial chunk of my income. And I’m still able to travel and splurge a little here and there, go out for dinner or drinks, etc. I do think that hitting that $105k mark in my area would be a boon – I’d have a much harder time managing expenses if my partner and I had a child on the same salary, for example, and big expenses like a wedding or a home purchase would be much more viable with that higher income.
But at the end of the day, if my needs (and my theoretical family’s needs) are met, there’s money saved for emergencies, and I actually have the time to spend with the people/things that make me happy, *that* is I think the ideal. I agree with TL in that respect in particular – when you have too much, that can add to your stress and diminish your happiness.
Anon for this
Midwest MCOL 2 adults with 1 teen and our HHI is $67k. Whenever we get a windfall we put it into paying off student loans faster. Once those are paid off this will be a very comfortable amount for us.
Bay Area money
For you Bay Area ladies, what is your HHI and what do you feel is “enough” to feel comfortable? We are moving to the area soon and I’m curious to see responses given that the Bay Area is such an outlier when it comes to cost of living.
Anon
I left recently (we earned $400k combined) in large part because it wasn’t enough to afford the lifestyle I wanted (a single family home in a good school district, especially). And yes I realize that sounds INCREDIBLY privileged, but here’s the thing – we were 32 and had saved the down payment for a $3-4M home, which would have bought a nice house in a good district. But the idea of getting locked into that kind of mortgage for 30 years was way too stressful. What if one of us lost our jobs? What if the market completely crashes and you’re suddenly a million dollars underwater? What if I decided I wanted to work part time for a while after kids? I was just too risk averse to take on the kind of debt that would require us both to stay at our high-earning jobs basically indefinitely. Most of my friends have similar salaries and ended up buying homes in that price range, but I was just too cautious and would have been too stressed about money if we did that.
Anon
I can’t even fathom what it’s like to make $400k, let alone make $400k and feel like it’s not enough. That is just so much money. Madness.
Anon
It’s also madness that it’s basically $3M minimum to get a single family home in a decent school district. You can’t judge what’s “enough” in a vacuum, it’s all relative to cost of living. Even with 20% down, we were looking at a $12k/month mortgage, which was more than 60% of our takehome pay. Any financial advisor will tell you that’s a huge percentage of your income to be spending on housing. Most people in the Bay Area are comfortable with that, I was not.
Fwiw, my husband and I moved to a much lower cost of living city, took giant paycuts and now feel unbelievably wealthy here on a little over $200k…because our house cost $600k. It’s all relative.
Anon
Where did you move?
Anon0219
Same, we left for dc and a huge pay cut (about $100k) and feel so much more financial breathing room. We felt comfortable at about $400k/yr but also felt like we’d be locking ourself into longtime servitude to big law. I recently got approached about taking a job back in the bay and realized I’d need to make back at least $100k more to have a similar lifestyle to the one we have in dc (after taxes it would be $70k, add in daycare and 2-3x our mortgage). Even during the 5 yrs we lived there- houses in our area jumped from $500k-1.5 mil for a 900sqft bungalow in the peninsula.
East Bay anon
In the SF East Bay, a decent (but small, 2 bed/ 1 ba) house could be $1-1.5M — families were raised in these houses in the 1930 & 40s.
Interesting
My friend who lives in the Bay Area bought a “modest” condo for around $1M and put her kid in private school. She is really happy with her decision, as it gives her flexibility to live in a lower cost area and in her opinion, even the “best” public schools are not that great in part due to the fact that CA has one of the lowest funding for schools in the country. She said that with the new tax plan, there is much less benefit to buying an expensive home in a good school district because you can only deduct up to $1M.
Anon4This
This. We have a combined HHI of about $500k — but the real estate hurdle is real. We rent exactly for the reasons you mentioned: what if one of us loses our job? And so I will happily leave whenever my husband agrees.
anon Palo Alto
You can get a decent family home in an excellent school district in the Bay Area for $2-3 million. It’ll probably have 2 bedrooms, might be a condo. It won’t be super luxurious.
For me, enough in the Bay Area is enough to cover a mortgage (depends on what you need and how much you can put down), enought for excellent daycare/afterschool care/camps (30k/year/kid for daycare, 15k/year/kid in elementary), plus the ususal expenses (higher here, but less absurdly so).
The Bay Area is a great place if you make a ton of money but aspire to live modestly. I don’t know anyone in their 20s/30s who likes to give the appearance of great wealth—even if they have it.
Anonymous
You can get actually a pretty nice house for $1.5 -2 million in orinda or Moraga which has the top school district in the state.
Anonymous
We live in the Bay Area and have household income of $330k and feel totally fine. BUT we bought our house 15 years ago for only $800k and now it’s paid off.
Depends on where you are going to live, kids etc.
The people I know who actually live in SF and send their kid ds to private schools make over a million. But you can live in the east bay and make $250k and be fine.
CeeCee
I disagree that 2-3 million is required for a single family home in a good school district in the Bay Area. We bought recently in Marin in an excellent school district for 1.3 million. HHI 330k with two working adults and one child. We are very comfortable.
NewMomEsq
2 adults and 1 toddler, living outside of los angeles, approx $250 hhi – living comfortably but does not feel like enough. struggling to pay off debt/get ahead. but we also have brand new law school student loans and 2 car payments.
I think we need another 50k+ to not have to check the price of fancy cheese when shopping at wholefoods.
Anon
I think it’s crazy to act like one number is sufficient for all areas and family situations. Right now, I’m single and feel like I have more than enough money to meet my needs on a 150,000 salary. But I’m thinking about having a kid, and not sure how I’ll find 24k a year for childcare and money for all the other expenses that come with the a kid. Literally, that money does not exist in my current budget given that I live in a HCOL and I don’t have nearly that much discretionary spending in a month
Anon
I’ve had some huge fluctuations in this area over the last few years and agree with the poster above who noted that it’s very personality driven, over a certain amount. I’ve always been a generally happy person.
I live in a LCOL city in the south. I was married for a long time with a HHI of $190 and felt VERY comfortable. We had a gorgeous house, nice vacations, and didn’t have to check the price on much of anything on a day-to-day basis. I was happy with finances, but not happy in the marriage or in my general life.
Then divorced, and went down to just my income of $110. It was still very comfortable and as a single person, I still didn’t have to check the prices too much, though I cut out fancy travel. But I was miserable because I really hated my job, which basically required me to be on call all the time.
Now I’ve got a new job at a nonprofit that I LOVE. I’m making $80, which is still very comfortable for this region, especially as a single person. I had to downsize and am renting an apartment, but it’s a very large and nice apartment. I no longer have a cleaning person, and I’ve given up some other luxuries and don’t shop as much, but I work 40 hours per week and am happier than I’ve ever been as an adult. I recognize I would not be so happy if I was truly struggling financially (as opposed to giving up a few luxuries), but I’ve also learned that it takes way less money to be happy than I thought, as long as other areas are going well.
Anonymous
I think there’s a big distinction between happiness and comfort. And part of the diminishing returns is that, with more money, people can more easily default to consumption and comfort to find happiness, without necessarily finding it.
anon a mouse
HHI $250K and it’s a good number for the DC suburbs. We can afford our mortgage, save quite a bit, and not worry about luxuries from time to time. We live pretty frugally and don’t travel much but plan to more after daycare ends. We don’t have any debt anymore (except the mortgage) and that’s probably the key to feeling so comfortable.
I feel like our income is at the level where we’re not chasing additional money, and a higher-earning job would be scrutinized if it would dramatically alter work-life balance. I don’t want to earn a lot more if it eats into my friend and family time.
Northwest Islander
*post got lost*
$105K sounds like a solid number if your home is paid off, retirement well-funded for your age, no aging parents to support or other contingencies. If you have children, make that a paid off home in a good school district.
I cleared less than $25k/year when I was first out of college. I felt flush because I was living in a very LCOL town with a lovely roommate to share expenses.
Now as a lawyer I clear more than 10x that amount, but my standard of living hasn’t gone up much because I am living in a very HCOL city and ditched the roommate in my 30s.
BTW, my big current salary buys LESS than what my cop grandpa and part-time librarian grandma could afford on their salaries. Lovely house on Long Island, a summer cottage in the Hamptons one block from the beach, horses and college funds for the kids, and extra left over for savings on top of gold-plated pensions. I know plenty of couples clearing $500k/year in my area, and none are living as large as my high school diploma grandparents could on their middle class salaries.
March
I have worked as an engineer (~$60k) and now work as an in-house lawyer ( ~$140k-270k), and I have been happy enough at all of those salaries. However, these days, my happiness comes from being able to save a lot of for retirement / financial independence. You do need a lot of money to be able to save a lot. I’m busy, but the work tends to be mundane. I get lots of pleasure from knowing this stretch has an eventual end. I know that I should probably find a different job that is more fulfilling, but I already have a very good job in my field. I don’t think the situation would be better other places, and I don’t really want to move because my husband has a job, too. Yes, I know my issues are self-inflicted. I keep telling myself I should be more grateful, too. I just take joy in knowing that by saving I am speeding up the time until I get to move on to the things I want to do and live in the place where I want to live.
Anonymous and Poor
Tying happiness to dollar signs is one sure way to always be chasing happiness.
Based on the numbers here, I am poverty-level and should be depressed and miserable AF.
CR
Highly recommend the classic “Your Money or Your Life” and the much more recent “Meet the Frugalwoods” (memoir about a Boston couple who live extremely frugally for 3-4 years to basically retire and move to the country in their early 30s).
Anonymous
100% on “Your Money Or Your Life.”. It’s just a great perspective to realize the huge opportunity costs of big jobs that require a lot of outside help to maintain. My husband and I were both on senior management career tracks 1 0 years ago, with young children. But it just got to be too much. Plus, one child was diagnosed with developmental disabilities, and needed more hands on parenting time. We downsized to a much smaller house and associated mortgage, got lower stress and lower wage jobs, watch all our expenses, drive 15 year old cars, and take one modest vacation per year. If we want something big, we save for it. But we are so, so much happier than before! A big help was also moving to a more modest neighborhood, where “The Jones” don’t live. Our old neighborhood and school was all about appearance. Yuck. So glad we moved!