For most Americans, a comfortable living equals at least $50,000 — almost $4,000 more than the 2004-2005 median household income of $46,326.
Twenty-four-percent of Americans say that even if they earned less than $50,000, they could live comfortably. Just about half (48 percent) say they would need to earn $50,000 to $100,000 to live at ease, but 23 percent say they’d have to earn more than $100,000, according to a new MSN-Zogby poll.
But, beware — even if we earned these incomes and were living comfortably — it doesn’t mean we’ll be more content.
Money doesn’t equal happiness
While most people assume that a higher income will make them happier, a 2006 study by Princeton University researchers found the link between money and happiness is mostly an illusion.
“The belief that high income is associated with good mood is widespread but mostly illusory,” the researchers wrote. “People with above-average income are relatively satisfied with their lives but are barely happier than others in moment-to-moment experience, tend to be more tense and do not spend more time in particularly enjoyable activities.”
Two Princeton professors — economist Alan B. Krueger and psychologist and Nobel laureate Daniel Kahneman — joined forces with researchers at three other universities on the study. The goal was to formulate different methods of measuring the well-being of individuals and of society; they ended up with deeper insight to income and happiness.
The researchers developed a tool to measure people’s quality of daily life known as the Day Reconstruction Method (DRM), according to a press release. DRM creates an “enjoyment scale” that makes people jot down the previous day’s activities in diary form and assess their feelings about the experiences.
The survey showed that respondents who earned less than $20,000 a year reported only spending 12 percent more of their time in a bad mood than those who earned more than $100,000.
“If people have high income, they think they should be satisfied and reflect that in their answers,” Krueger says. “Income, however, matters very little for moment-to-moment experience.”
Mo’ money, mo’ problems?
Most of us believe more money equals more happiness, but we forget a few things. First of all, no matter how much money you make, you can always make more. There’s no proven amount you can earn to declare yourself “happy” — you’ll end up chasing a higher salary year after year.
Even if you do reach a higher income level, earning more money doesn’t necessarily mean more smiles — in fact, it probably means more stress. We overlook the fact that earning more typically means working more. Working more means less time with family, friends, and for yourself. If you could earn double your income by working double the hours, would you?
Higher-income people tend to be tenser and devote more time to “obligatory” activities like work, shopping and childcare, according to a nationwide Bureau of Labor statistics survey on how people with varying income spend their time.
Men earning more than $100,000 per year spend 19.9 percent of their time on activities such as socializing or watching television, compared to 34.7 percent for men making less than $20,000, according to government statistics. Women making more than $100,000 spend 19.6 percent of their time on passive leisure, compared with 33.5 percent of those earning less than $20,000.
“In some cases, this focusing illusion may lead to a misallocation of time, from accepting lengthy commutes (which are among the worst moments of the day) to sacrificing time spent socializing (which are among the best moments of the day),” the study says.
Essentially, money is not all that matters in a job or in life. So stop trying to keep pace with the Joneses — it’s what money can’t buy that brings happiness.