Benefits: Deliberately Think about how much money you need to be happy (or, in other words, meet your needs).
So That You Can: Begin to change your money mindset and build a healthy relationship with money.
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The Question of a Lifetime: How Much Money Do You Need to Be Happy?
Nothing has the potential to divide our world, our country, and even our own families quite like money. (Except maybe religion, which I have also written about ?)
But why? Why do we give money so much control over our lives? Why do we even want money to begin with? Why do we always want more of it? And what the heck are we going to do with it once we have it anyway?
These are questions that we don’t stop to Deliberately Think about very often, but if we did, our answers would help us build a healthy relationship with money.
We Take Our Relationship With Money for Granted
We take the idea that money can buy us happiness for granted because we’ve been sold this precept since the day we were born. Even as toddlers, we knew that money could buy us that super-duper new toy they kept advertising during our favorite cartoons.
We grow up knowing that Mom and/or Dad go to work to make money because they’re adults, and that’s what adults do so that they can take care of us.
As we get a little older, we start to notice that the “cool” kids have name brand shoes and jeans, and we want them too. Inevitably, they cost more money. So it stands to reason that Mom and/or Dad go to work to make money, to buy us the name brand stuff we want, so we can be one of the “cool” kids, and then of course, we will be happier.
Sounds kind of silly doesn’t it? But most of us have been there, and a lot of us still have that mindset to some extent. Only, on top of the brand name clothing, we also want the status symbol car of the moment and the house in the perfect neighborhood. Then we’ll be happy, right?
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Wrong! (Kind of)
Buying the clothes, the cars, and the house can actually make you happy — momentarily.
In my 1 Minute Motivation, “3 Reasons You’re Not Supposed to Be Happy,” I introduced my view that you can’t “be” happy, mainly because happiness is a feeling that comes and goes. Happiness is not a state of being.
Back to the status symbols, acquiring these must-have items can definitely make you feel happy, but they will not sustain this happiness so you will seek out more and more and more, never knowing why.
Unless you stop to Deliberately Think about what you are really trying to buy. Are you really trying to buy happiness or fulfillment? After all, you can “be” fulfilled, but you cannot “be” happy. But can you buy fulfillment?
Well, let’s find out.
And the Survey Says . . .
Yes, doctoral students have actually tried to quantify the amount of money it takes to be happy. A study published on 1.08.18 by four Purdue University students found that, “. . . [income] satiation occurs at $95,000 for life evaluation and $60,000 to $75,000 for emotional well-being.”
Satiation is just a fancy way of saying satisfaction, and we’ve already determined that, as Deliberate Thinkers, we are fed up with mediocrity. We are no longer willing to settle for being satisfied; we want to live the fulfilling lives we were meant to live. So we can’t accept that hypothesis.
Next, let’s turn to some economists. Angus Deaton and Daniel Kahneman, economists at the Center for Health and Well-Being at Princeton University, found that $75,000/year was the magic number for buying “life satisfaction.” There’s the S word again.
Satisfaction is Important
To be satisfied, we have to meet our basic needs (food, water, shelter, etc.). I’m guessing that the people who claimed to be satisfied in these studies had also achieved some of their psychological needs (belonging, love, esteem). Basic needs and psychological needs are the building blocks to realizing our full potential, so fulfilling these needs is definitely important.
So we can agree that satisfaction is important and that we have to meet certain needs in order to be satisfied. The question is, what part does money play in that equation? In our society, money is required to satisfy our basic needs, and money may even be required to satisfy some of our psychological needs.
Perhaps making a certain amount of money reduces your stress level because you’re not worried about paying your bills, which leads to better relationships. Those better relationships lead to improved self-esteem. Improved self-esteem leads to more recognition and status at work. Recognition and status leads to more freedom in the way you are allowed to perform your work.
So it would seem that money did help to satisfy your psychological needs. Or did it? Read that paragraph again. Did money really satisfy your psychological needs?
Can Money Satisfy Psychological Needs?
No!
Keep in mind the fact that your basic needs have already been met. After that, your psychological needs are completely dependent on your expectations, thoughts, and actions. You can fail to meet your psychological needs and live an unfulfilling life even if you make more than enough money to cover your basic needs. Even if you make more than the magical $75,000 that will supposedly keep you satisfied.
How do I know? Because I was a CPA (professional accountant/auditor) for over 20 years. I worked with clients who were barely scraping by, and I worked with clients whose salaries were in the millions. I can tell you one thing for sure; at least 90% of the millionaires (maybe even 95%) never had enough. They always wanted more, more, more.
The millionaires were not any more fulfilled than my clients who were at poverty level, and they were definitely not satisfied. Why not? Was it because they didn’t have money? No. It was because they were not Deliberate Thinkers who had taken the time to examine their relationship with money, as we are doing right now.
There’s One More Type of Need to Consider
If you’re familiar with Abraham Maslow’s Hierarchy of Needs, you know that it’s often presented in triangle form. You may have noticed that the basic and psychological needs I referred to above are at the base of that triangle. At the very top is one last set of needs.
Growth needs — oh yeah! Now we’re getting to the good stuff. We all have a need for personal growth. Personal growth leads us to our full potential, or self-actualization as Maslow called it.
Maslow described self-actualization as a continual process of “. . . becom[ing] everything one is capable of becoming.” He also offered this description:
It refers to the person’s desire for self-fulfillment, namely, to the tendency for him to become actualized in what he is potentially.
The specific form that these needs will take will of course vary greatly from person to person. In one individual it may take the form of the desire to be an ideal mother, in another it may be expressed athletically, and in still another it may be expressed in painting pictures or in inventions.
The question we are attempting to answer here is, is money required to meet our growth needs? That’s a tough one, but in our society, yes, I would say that it is.
Again, assume you have met your basic needs, but those needs consume all of your earnings. In the context of Maslow’s examples of being an athlete, artist, or inventor, you are going to need some “extra” money to pursue your personal growth. An athlete needs gear. An artist needs paints, brushes, and canvases. An inventor needs materials and tools.
Yes, indeed, money is going to be required to meet our growth needs.
Hmmm...Maybe You Can Buy Fulfillment
Seriously?!? That is not the point I thought I would be making with this post, but that’s where I’ve ended up.
Okay, so you can’t actually “buy” fulfillment, and some people’s form of fulfillment won’t require the purchase of any goods or services. Take the ideal mother in Maslow’s example; she doesn’t require any goods or services beyond those that provide the basic needs for herself and her children. (Although, a little money for that glass of wine after the kids go to bed might be helpful ?).
Nevertheless, some outlay of money is going to be required in order for most of us to become everything we are capable of becoming. Although I love being a mom, being an ideal mom is not a growth need of mine. That is more of a psychological need for me.
My growth needs require money, and yours probably do too. Let’s take a quick look at some of the things that money can buy to give you a better idea of what I’m talking about.
First, I need to have a computer and internet to create content and meet my growth needs. Sure, I could go to the library, but I would have to get there somehow. Yes, I could ride my bike or walk, but then, at a minimum, I would need a bike or decent shoes and snow gear.
I also have to pay site hosting and other fees associated with maintaining a website. And, if I hope to have my income from this endeavor pay for my basic living expenses, I need to invest some money in marketing, payment processing, etc.
What goods or services do you need to purchase to become everything that you are capable of becoming?
And the Answer to the Question at Hand is . . .
It depends – HA! But seriously, let’s summarize.
You need to “be” fulfilled in order to “feel” happy more often than not; again, you cannot “be” happy.
In order to be fulfilled, you first have to meet your basic needs. Meeting your basic needs requires money, but I think it’s worth taking the time to Deliberately Think about how you define basic needs. I know I could definitely meet my basic needs for a lot less money than what I currently spend on them. I could then reallocate that money to meet my growth needs.
You also have to meet your psychological needs to be fulfilled. I think money can certainly help give your psychological needs a boost, and I have another post dedicated to that topic. But at the end of the day, I don’t think you need money to meet your psychological needs.
Last, but not least, in order to be fulfilled, you have to meet your growth needs, and, in our society, I just don’t think there’s any way around spending some money on these needs. The questions then become, how much money is it going to take, and what are you willing to give up in exchange for self-actualization?
(I have another post to help you answer that question.)
Are you willing to give up some of the comforts and conveniences associated with your basic needs. For example, you don’t “need” a nice house. You only need a roof over your head and some basic amenities. Would you be willing to downsize your home if it meant you could fulfill your growth needs?
Yikes…those are some tough questions. Our members can access a follow up post that includes a formula I devised to answer these questions with some real, practical numbers. Not a member yet? Click here to discover our member benefits.
And, don’t forget to check out the worksheet that accompanies this post, which will also help you answer these questions.
Click here for more posts with an “intentional living” theme.
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And until next time . . . STAY CURIOUS!
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Links
The Exact Amount of Money it Takes to Make a Person Happy Just Got an Update, Eric Mack, Inc., 2.16.18
Happiness, income satiation and turning points around the world, Andrew T. Jebb, Louis Tay, Ed Diener & Shigehiro Oishi, Nature, 1.08.18
Sociologists Study How Much Money You Need to Be Happy, Joshua Kennon, The Balance, updated 8.12.19
Maslow’s Hierarchy of Needs, Saul McLeod, Simply Psychology, updated 2018,
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