For most people, employment is necessary to earn a living. Life may be incredibly difficult and unpleasant if you can’t cover basic expenses or you start accruing a large amount of debt.
However, you probably have to spend a significant amount of time at work to earn that money. If you’re miserable for every minute you spend at work, life may be similarly stressful and unenjoyable.
Your salary and how you earn it are two of the many factors that can impact your happiness and emotional well-being. Like anything else in life, you have to find the right balance between your earnings and your job satisfaction to find happiness with your finances.
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Can Money Buy You Happiness?
It’s thought that money can buy happiness, but only to a certain extent. According to a 2010 study with the National Academy of Sciences, emotional well-being does rise with income. However, after a certain point — determined by the researchers to be about $75,000 per year — earning more money will not bring you more happiness.
However, a more recent study discovered that day-to-day happiness and overall life satisfaction increase well beyond this $75,000 threshold. This study found “no evidence for an experienced well-being plateau above $75,000” per year, suggesting that bringing in more money might make you happier.
Because everyone’s finances are unique, there is no single, perfect salary that will guarantee happiness. Everything, from the cost of living in your area to the debts you owe to your financial goals, can impact both your personal and financial well-being.
The amount of money you need to be happy is likely different from the amount others need. Further, your own financial needs will likely change throughout your life.
It’s not about how much money you have; it’s about how much money you don’t have. Having money may not make you happy, but having no money will make you miserable. You need to earn enough to take care of your essential expenses and live comfortably, but having an abundance of money isn’t the key to lasting, profound happiness all on its own.
Does Spending Money Make You Happy?
In a literal sense, spending money can make people happy. One study even suggests that spending money may have a larger impact on happiness than earning money does. Your brain treats shopping as a reward and releases dopamine — a neurotransmitter associated with pleasure — in anticipation of that reward.
Though the brain is essentially hardwired to enjoy spending, everyone is unique, and the purchases that make you happy may not do the same for others. However, a growing body of research has discovered that it’s best to spend money in the four following ways to maximize its impact on happiness:
- Time: Buying services that can help you save time has been linked to higher levels of satisfaction in working adults than material purchases.
- Others: People tend to be happier when spending money on other people, rather than on themselves.
- Experiences: People have reported that purchasing experiences brings them more happiness than material purchases.
- Treats: Some researchers believe that spending small amounts of money on frequent treats for yourself can boost happiness more than larger, infrequent purchases.
That being said, material purchases can still bring happiness. Studies report that shopping can positively influence both immediate and long-term happiness. Further research suggests that “retail therapy” may be particularly beneficial for lower-income individuals who have to be deliberate with their spending.
That being said, you need to learn when it is appropriate to treat yourself and when it isn’t. While higher earnings have been associated with increased happiness, some researchers have also linked lower income and poverty with increased sadness.
If you overspend or don’t stick to your budget, you may experience financial stress. In addition to putting pressure on your finances, this may also negatively impact your mental health. Simply put, if you aren’t careful, your spending will hurt your finances and well-being far more than it helps.
Are You Working to Live or Living to Work?
Income aside, the way you earn your money — and how you feel about your job — can also impact your happiness. Consider your attitude and approach to work to determine whether you want to prioritize your earnings (working to live) or satisfaction at work (living to work).
Prioritizing Your Salary
If you work to live, your job is a means to an end. It allows you to earn the money you need to live your life. You may not enjoy how you earn money or find satisfaction in your job. It doesn’t necessarily matter what you do — you can work in a relaxed entry-level position or a high-level executive role — you’re just doing it to support yourself and your lifestyle.
There are several things to consider before making money your top priority:
Time at Work
If you’re only concerned with making money, you probably won’t find your time at work to be very exciting or fulfilling. People tend to spend a significant amount of time at work, and if you don’t enjoy your job, that means you likely won’t enjoy the majority of your workdays.
If doing meaningful work isn’t as important to you as your friends, family, and hobbies, you may not mind the lack of enjoyment. There’s nothing wrong with treating your job as just that: a job.
Career Growth
Being in it for the money is a great motivator to advance your career. If you work in a high-paying field, this means you stand to make even more money by moving up.
You may struggle to grow professionally if you aren’t committed to what you do. If you’re just completing task after task, you may not learn new things or develop your skills as readily as someone passionate about the work. This puts you at a significant disadvantage compared to more dedicated candidates who do have the necessary knowledge and skill set.
Work-Life Balance
If you work to live, it’s easy to make a healthy work-life balance one of your top priorities. When you aren’t working, you have the money you need to live your life and enjoy yourself. However, your ability to cultivate work-life balance will depend heavily on your line of work.
If you work in a job where you can leave your work behind at the end of the day, you’ll likely be able to focus on your personal life more easily as soon as you’re off the clock. If you work in a job where your work follows you home, it may be hard to forget about the stresses of work during your free time.
Health
If you only care about your paycheck, your work could negatively impact your physical and mental health. Researchers have found that being dissatisfied with work in your 20s and 30s may have long-term health consequences.
What’s more, if you work in a fast-paced or high-stress position, you may face additional health struggles or grow even more dissatisfied, creating a vicious cycle.
Not liking your job doesn’t automatically mean you’ll have health issues. If you’re more focused on your personal life, you may find it easier to keep yourself healthy. Further, researchers have found a link between health and wealth.
Not only do wealthy individuals tend to live longer, but they also have more healthy years after age 50 than lower-income individuals.
Money
Naturally, the biggest benefit of a high-paying job is the money. You’re financially secure, and, if you play your cards right, you can carry that security with you into your retirement. You may also reap some of the happiness benefits of having financial security and disposable income that you can spend.
Prioritizing Job Satisfaction
If you live to work, you’re likely fulfilled by what you do and have a high level of job satisfaction. Your identity isn’t necessarily tied to your job, but you’re happy with how you earn your money.
You should consider the following factors before committing to a living-to-work mentality:
Time at Work
Because you care about what you do, you’ll enjoy the time you spend working. You’ll be engaged with what you’re doing and motivated to do it well. You may also have an easier time fitting into the company’s culture and getting along with your coworkers.
However, there’s no guarantee that you’ll always believe in this organization or be interested in this line of work. If your passion changes, you may have to make a major career change later in life. What’s more, you may grow to dislike what you were once passionate about because it has become a job.
Career Growth
It’s easier to advance your career when you are dedicated to and excel at your job. You’ll likely seek out new opportunities for learning and growth on your own, putting yourself in a natural position to step into a new role. Employers and hiring managers recognize when someone puts their heart into their work and isn’t just collecting a paycheck.
Depending on your field, there may not be many advancement opportunities available. This could be due to the competitiveness of your chosen field or the nature of the job itself. If you’re truly passionate about something, the lack of opportunity could feel limiting, stifling, and frustrating.
Work-Life Balance
Even when you like your job, you have to strike the appropriate work-life balance. This may be more difficult to do if you’re over-committed to your work or struggle to extract yourself from activities that intrigue you. Focusing too much on your job can be exhausting, resulting in burnout, resentment, dissatisfaction at work.
Prioritizing your personal life may increase your satisfaction with your job. It’s much easier to enjoy your work, and do your best work when you have time to take care of yourself, tend to your relationships, and pursue your other interests.
Health
There is a strong correlation between job satisfaction and health. It’s thought that employees who have high job satisfaction have better physical and mental health than dissatisfied employees.
Still, job satisfaction is far from the only thing that affects your health. It may contribute to boosting your health, but being satisfied at work is only one part of a healthy lifestyle. You can still enjoy good physical and mental health working at a job you don’t love, particularly if you take care of your health in other ways.
Money
You may not be earning as much as you could, but you’re happy with how you earn that money. There could be other benefits and perks that make the lower pay worth it, especially since you get to work your dream job.
If you’re lucky enough to be passionate about a high-paying profession, such as information technology or engineering, then you don’t have to make sacrifices when it comes to job satisfaction or salary.
Considering Each Approach
For some, a job may be worth the high pay and long hours if they get to spend their free time doing what they want; others may be more willing to take home a smaller paycheck if it means they enjoy the time they do spend at work.
Happiness is subjective, and neither of these approaches is inherently wrong or bad. It just depends on what you care about and how you want to live your life. Think about which approach works best for you and come to a decision that works well for your finances and life.
Can You Have It All?
Depending on your field, financial situation, and values, you may not have to compromise between a high-paying job and a job that is fulfilling and satisfying. Either way, it’s important to remember that happiness isn’t a destination or an achievement; it’s a fluid and temporary state that changes over time.
What makes you happy now may not have the same effect in the future. Prioritizing income may be the right thing for you early in your career, but later on, you may benefit from a job that you enjoy doing more.
While some of your choices can have lasting consequences on your life and career, it’s never too late to make a change. If that change makes you happy, it’s worth doing for the sake of your finances, career, and overall well-being.
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