How Much Money is Enough?

Have you ever thought about how much money is enough for you? In other words, how much money would give you a feeling of happiness or contentment?

Dr. David Krueger, the author of The Secret Language of Money, has given a money quiz to hundreds of people over the years, where he asks two simple questions:

1. What is your current annual income?
2. In order to insure happiness and contentment financially, with no more money problems and worries, how much annual income would you need?

Dr. Krueger reports that in more than 9 out of 10 cases, people respond that their annual income would need to be about twice what its current level is, for them to feel happy, content, and free from money worries.

Wow – this surprised me! I thought most people would want maybe 20-25% more, not 100%.

Interestingly, Krueger has also found that when people do double their income over time, their “magic” number for happiness and contentment often doubles as well.  So a person making $50,000 seven years ago believed that he needed to make $100,000 in order to be content and free of money woes.  Today, he earns $100,000 in annual income, but does not feel content or free of money woes.  Instead, he thinks he needs $200,000.

“What this suggests,” says Krueger, “is that the actual numbers (that is, the money itself) have nothing whatsoever to do with (feeling happy, content, or free from money worries), because even when you change the numbers the story remains the same.”

So if the amount of money we earn doesn’t bring a feeling of contentment or freedom from money woes, how can we find money contentment and freedom?  Here are some thoughts:

1. It’s not what you earn, but what you keep, that really counts.
2. If you can’t live within your budget at your current income level, you won’t be able to do it at any higher income level.
3. Expenses will naturally rise to meet (and even exceed) our income unless we create a plan on paper and decide in advance how we’re going to spend and save our money.
4. Contentment is a state of mind. You can be content at any income level if you put your mind to it.
5. Your level of financial contentment is based on your definition of what money means to you (which is something we’ll talk about soon).

So what do you think?  How much money will make you happy?  Is it twice what you’re making today?  Why or why not?

You might also like:

• How to make more money in your job in 2011
• Do the work you love
• The secret to self motivation