How much money do you need to live comfortably and be happy?

by Washington Federal Team on September 10, 2012

We’ve all heard that money makes the world go ‘round, but does it make your world a happier place? Picture your life with just the basics. How much cash does it take to live? How comfortable would you be with only the bare necessities? Finding your financial comfort zone can help you live comfortably and be happier with less money.

Living comfortably

While speaking with MSN Money, author Laura Vanderkam explained that day-to-day happiness seems to be at its highest when one can live comfortably, not necessarily luxuriously. What does it take to live comfortably? According to WSL/Strategic Retail, a “significantly higher” income is needed to feel financially secure in today’s economy. Surprisingly, nearly 30% of Americans in the $100-​150K income bracket claim they can only afford the basics.

What are your basic needs outside of the absolute necessities? Do you need a smart phone or a clothing budget? Perhaps you need a working vehicle, new tires or a computer for your job. Each person has their own set of “needs” to survive, so calculating a set goal amount is difficult. Determining which areas and items of your life should receive priority can help you to set aside the funds necessary to maintain or add to your basic necessities.

In the meantime, snap! from Washington Federal can help you review, manage and forecast your finances. This useful tool helps track spending, set budgets, manage your debt and more. Determine how you can live comfortably for less today.

The research – Money can’t buy happiness!

As outlined in the 2012 Poverty Guidelines for the 48 Contiguous States and the District of Columbia, a one-person household is considered to be living in poverty if they make less than $11,170 per year. According to a study of 32,000 young people, The Guardian reported that children living in poverty are as happy as classmates from wealthier homes.

Authors of the forthcoming book, “Happy Money: The Science of Spending,” Elizabeth Dunn and Michael Norton spoke with the New York Times on their research and findings regarding money and happiness. Based on a national sample of Americans, more money did not exponentially mean more happiness. Doubling salaries from $25,000 per year to $50,000 did not lead to double the happiness; those who earned $50,000 were only 9 percent happier overall.

Vanderkam said there are a few ways to measure happiness in its relation to money. One is to assess how life is going overall. Vanderkam explains that while positive outlooks keep rising with income well beyond $100,000 per year, “mood,” seems to be at its highest with people who make around $75,000.

So what do you think? How much money do you need to be happy? Tell us on Facebook!


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