The Price of Happiness: $50,000?
Good news! Apparently, happiness is on sale for the new, low price of $50,000.
Nope, we’re not talking about private trips to outer space, or even tuition for an Ivy League college. Apparently, all you need to be happy is $50,000 in yearly income.
That’s the finding of a recent poll by the Marist Institute for Public Opinion, which saw big differences in almost all facets of happiness between those who earn less than $50,000 and those who earn more.
Call it the happiness tipping point, if you will.
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Respondents to the poll who made more than $50,000 were more satisfied with their lives concerning factors ranging from friends, to health, to how they spent their time. Unlike getting a raise from $35,000 to $40,000, or even $60,000 to $65,000, “$50,000 is the mark where you start to see significant differences,” researcher Susan McCulloch told LearnVest.
Happiness: Now 33% Off!
Depending on your own situation, $50,000 might sound like a lot. But this is actually a steep discount from what studies previously cited as the golden number: $75,000. A 2010 study from Princeton University’s Woodrow Wilson School found that, up to $75,000, each boost in income increased participants’ happiness. But after that, bringing home more income ceased to matter in their overall life satisfaction.
So it seems the sweet spot is somewhere between $50,000 and $75,000. If you make under $50,000, you might be stressed about your financial situation. If you make over $75,000, the additional returns on working longer hours might not be worth it anymore. But it’s nice to know that a $75,000 salary isn’t necessary to be happy. It’s just a perk.
In other words: the pursuit of happiness, for 33% off the original price.
What About Me?
Your next question might be, “Is the secret of life getting a $50,000 salary?” Not necessarily. A big factor in our happiness is how we compare to others. If you’re making more than $50,000, you’re in the top 44% of Americans. And, yes, you might feel good about that.
However, if you happen to live in a place with a high cost of living like New York City, where for some people even $300,000 doesn’t seem to be enough and the top 1% feel poor, that golden number might be skewed upward. Likewise, if you live in a place where the cost of living is low, your happiness tipping point might be even lower; LearnVest reader Carla seems pretty darn happy and is meeting her financial goals on a $40,000 salary.
Get to Your Happy Place
If you’re under the $50,000 mark, don’t give up on happiness yet. Like we said before, if you live in a place that has a low standard of living, your tipping point might be much lower. But there are some ways to push your salary higher:
The first key to getting to the number you want is to ask for it. Read our guide to getting raises, and check out this website which breaks down exactly how big of a raise you need to earn each year in order to get to your goal. (And if you need some encouragement: Here’s why Ryan Gosling thinks you deserve a raise.)
Find New Sources of Income
If a raise isn’t going to be possible, you can still look to pad your income by doing something you’re good at or just plain love. Maybe that’s SAT tutoring, cake baking, selling new stuff on Etsy or used stuff on eBay (here’s how to set up your own store). This stay-at-home mom earns an extra $400 a month doing odd jobs on Taskrabbit. That’s nearly an extra $5,000 a year toward the happiness tipping point.
Have you found a way to earn money on the side? Share your tip in the comments, or in LV Discussions.
If you’ve already reached your own salary tipping point, that’s awesome! But there’s always room to be even happier–so make sure you’ve checked these boxes, which will lead to long-term financial well-being.
Make Sure You Have a Budget
Even $200,000 wouldn’t be enough if you lacked a budget to help control your spending … and half of Americans don’t have one. But by visiting the My Money Center and linking your accounts to see how much you spend (and on what!), you can create a budget for free.
Focus on Retirement
The Marist poll also found that people earning less than $50,000 were likelier than people earning more to have trouble getting or paying for medical care (26% versus 8%), affording rent or mortgage payments (24% versus 6%) and shelling out for prescription drugs (19% versus 6%).
Interestingly, though, the study showed that even people above the tipping point were worried about retirement–an almost identical number of high income and lower income respondents (27% versus 28%) considered delaying retirement in the last year because of financial hardship. Taking care of this important financial to-do will take a load off your mind. Learn why it’s especially important for women to start saving now for retirement.
Know Your Priorities
If you’re already pretty satisfied with where you are salary-wise, know that there are many other things that factor into your happiness. Maybe your next negotiations should start focusing on other things, like: Would you be happier with a shorter commute, more reasonable hours or more vacation time?
Take our awesome work priorities quiz, which will rank factors like work culture, meaningfulness of your job, the benefits you get and the length of your commute to help you rank what’s most important to you.
After all, LearnVest is about living your richest life. We know there’s more than one path that leads to happiness.