How Much is Enough?
Is there an annual income level and spending level at which you and I can honestly say, “I have enough and I have spent enough, on me”?
Yes, I think there is. And I’m not alone. According to a peer-reviewed study by Daniel Kahneman and Angus Deaton from the Center for Health and Well-Being at Princeton University, money does buy happiness… up to $75,000 per year. After $75,000, the law of diminishing returns takes over. Life satisfaction and emotional well-being do not increase proportionally with the level of income increases.
This begs the question, “why do we think and act as if more money equates to greater emotional well-being and happiness?” One answer is advertising. The goal of the marketer is to convince the audience that their joy, contentment, and satisfaction is dependent upon their attainment of the advertised product. All we have to do is watch children on Christmas morning rifling through gifts to discover the error in such a belief. The joy and satisfaction of owning the new car peaks around the time we drive it off the lot. If more money, more toys, more houses, more vacations, and more stuff is the key to happiness, then movie stars and professional athletes are the happiest, most content, emotionally healthy people on earth. Yeah right!
The challenge for us is to find that level at which we can say, “earning more and spending more (on me) is not going to make me any happier or emotionally healthier than I am right now.” Since we know that spending more money does not translate into meaningful life contentment, can we identify an annual spending amount (adjusting for inflation) that is “enough”?
If you are earning $75,000 or more, you are likely already there. You sense that there’s no product or service for sale that will add to your life’s satisfaction in a meaningful way. Financially, you have already arrived. More spending is not the pathway to a better life.
If that is the blessed condition you find yourself in, then you are financially stronger than the vast majority of the other seven billion occupants of our planet. Consider erecting a glass ceiling over your spending and commit to no increases in annual personal spending, even as your income grows.
If the key to life satisfaction and happiness is not found in spending more, could it be found in generosity?
If the Loveland area – or anywhere along the Colorado Front Range – is home to you and you have concerns about your spending and savings plan, consider scheduling a complimentary consultation meeting with me.