author: jacob nelson | staff writer
We hear it time and time again: “Money doesn’t buy happiness.” The reason that phrase works is because most of us will never experience a great abundance of wealth in our lifetime. In fact, our generation is the first that has been predicted and observed as earning less wealth than our parents. Although the average household income has not lowered much, this has been attributed to a higher percentage of women in the workforce, creating more dual income households. The reality is that we do not make as much as our parents, relative to the cost of living. And with technology such as e-commerce, we are now much more susceptible to spending a lot more money on things we don’t need, due to the immediate convenience of being able to purchase anything at anytime.
So now my question for you is, does that scare you?
Moving into this era of less income, we now must take a much deeper look at what we are spending our money on, and if whatever we’re spending it on is even worth it. With personal and consumer debt both increasing year over year, people are much more willing to accept the risks that come with debt.
Personally, I think a lot of the unnecessary spending comes with what many people would consider day-to-day purchases, such as fast food. My grocery bill usually ends up averaging about $8.00 worth of food every day. That’s just a bit lower than most single meal costs at any fast food restaurant. However, I find that most people eating out often are those in a rush because of work, kids, or school and don’t find a lot of free time throughout the day to buy groceries and prepare meals. I did just speak of dual income households, after all, no more of the stay at home parents’ cooking and cleaning. But I am no financial advisor, and I’m far from considering myself a minimalist, so I’m not going to lecture you on spending habits. Instead, I’m going to leave you with a little hope. A goal, if you will.
Researchers at Princeton did a study a while back to determine the true level of happiness at different levels of wealth. What Angus Deaton (an economist at the Center for Health and Wellbeing at Princeton University) found was that the optimal level of financial happiness is around $75,000 a year ($100,000 CAD). Now most people are going to read that last statement and fire back with some witty comments about $100,000 being a very high amount for most. But in the era of dual income households, $100,000 is not relatively difficult to obtain.
Of course, a major income surplus improves one’s disposable income; however, it doesn’t necessarily correlate with happiness. Deaton said in an interview that “not surprisingly, someone who moves from a $100,000-a-year job to one paying $200,000 realizes an improved sense of success. That doesn’t necessarily mean they are happier day to day.” It was also noted that people were found to be happier on weekends, but that happiness was short lived due to a lack of deeper well-being. So maybe the $100 you spent at Gabbos last Saturday didn’t make your life better (go figure).
With so many ways to save money nowadays, we have a lot more options to live a much happier lifestyle while also freeing ourselves from the worry of future finances, like when we get old and the next generation has to change our diapers.