According to an American study, $75,000 a year is the ideal salary for the average American:
The magic income: $75,000 a year. As people earn more money, their day-to-day happiness rises. Until you hit $75,000. After that, it is just more stuff, with no gain in happiness.
[…] “Giving people more income beyond 75K is not going to do much for their daily mood … but it is going to make them feel they have a better life,” Mr. Deaton told the Associated Press.
I don’t know what anyone else thinks (I haven’t really read any other entries or articles on the subject), but I personally find this ridiculous.
Of course I understand that a lot of Americans might feel that more money equals more happiness, but I just don’t get this at all. $75,000 a year brings in about $6000 a month. For a single person, I think this is more than enough, in fact, I think this is twice as much as a person really needs. For $6000 I could live for three months very comfortably on my own. How can someone possibly need to have three times what I would need to feel happy and comfortable?
What are people spending this money on? I made a sample monthly budget with exaggerated numbers for one person to see what I could come up with:
- Mortgage – $2500 (A two bedroom home)
- Utilities/Cable/Etc. – $1000 (Cable package with the works, water, gas, electricity)
- Car – $500 (This pays for a nice luxury vehicle)
- Car/Health Insurance – $800 ($400 for health insurance that covers pretty much everything, $400 for car insurance if you somehow can’t drive or have gotten into car accidents)
- Gas – $200 (For tons of driving around town)
- Food – $400
- Entertainment/Dining – $300 (Weekly movies, dinner out a couple of times a week, activities)
Leaving a person with $750, which I imagine would go towards their debt, or savings, or anything else. Of course you could say that $6000 wouldn’t go very far for a house in California or New York, but I think this is an excuse. If I can afford a three bedroom home in Tennessee and only a one bedroom condo in L.A. for the same amount of money, I know where I’d rather be. The article doesn’t mention this though, so I’m going to skip it.
Now the budget above is for someone I feel has more than enough and spends a lot of money for basic things. I, for example, could live in a nice one bedroom condo for $1000, could drive a nice car for $300, could spend less on entertainment and eat in a lot more, could get cheaper health insurance by driving carefully, and certainly don’t need $400 a month to feed myself. After all of this I wouldn’t feel like I was missing all that much or was depriving myself of a nice lifestyle, and I would only need to make $2500 a month, which is more than half of what the average American feels they need to make to live.
The study doesn’t mention $75,000 for a family of four or a married couple, which leads me to believe it’s $75,000 per person, which makes me sad.
Of course, I think it all boils down to what a person feels is good enough. A new car a big house, and eating out a few times a week might help someone feel happy and successful. But I wonder if, after making all of this money and having all of these things, would they still feel the same three years from now? Five years from now? Why do people feel the need to attach self-worth to the things we own and the stuff we can buy?
If you took it all away, would that mean the end of happiness? If I make $35,000 a year, is happiness out of my reach? I definitely don’t think so. But apparently, I’m in the minority, and that’s the scariest thought of all.