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?
