I've seen this research before, but I'm always happy to be reminded of this fact – comfortable people are more happy than poor people, but happy factor levels off at $75,000. From the New York Times:
The catch is that additional income doesn’t buy us any additional happiness on a typical day once we reach that comfortable standard. The magic number that defines this “comfortable standard” varies across individuals and countries, but in the United States, it seems to fall somewhere around $75,000. Using Gallup data collected from almost half a million Americans, researchers at Princeton found that higher household incomes were associated with better moods on a daily basis — but the beneficial effects of money tapered off entirely after the $75,000 mark.
Of course, reality is more complicated than that. I've meant people who make over $200,000, but are in severe financial straights (like, the electricity getting turned off sort of straights), because of the inability to handle their money.
Apt. 11d 
I wonder what the role of assets/debt has to play. We have pretty much no debt right now (though we’re looking at houses; we’d add debt because we’d keep the current house and rent it out). For us, it’s the feeling of having no debt that is the best feeling.
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The United States is a big place. Chillicothe: $75K is pretty okay. Biloxi, $50K is nice. San Francisco, not so much. I take the point that having heat and clothes and enough to eat and being able to occasionally do something diverting is enough, but what it takes to do that varies.
We compare ourselves to others, too. If all our friends have X, we feel like we are out of it if we don’t have X.
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This was a really interesting article. The author looks at someone making $200/week to someone making $1000/week, and on up the income ladder.
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We’re talking about an individual making $75,000 per year, right? Because for a family in a city with high cost of living, $75K would not cut it.
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I think my sister’s family’s annual income might be around $75K, maybe a little higher (her husband has an NYPD pension). They live on Long Island (NYC suburb, high standard of living), and my sister is in a constant state of freakout over money. She hasn’t been able to work because of her cancer treatment and some of the aftereffects of a spinal tumor. And her husband often has to take off from his part-time job to take her into the city. I’m just thankful that police retirees have such excellent health insurance. Because of the UNION, I might point out.
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Anjali said:
“We’re talking about an individual making $75,000 per year, right?”
I have no idea how I would spend $75k a year, if I were a single lady. I know I could probably manage it with some combination of savings and travel, but it would require a radical rejiggering of my consumption patterns.
And ditto to the cost-of-living stuff. I’ve heard that in suburban VA, they are talking about (or are doing) subsidized housing for families with income up to the low 100s. Before we left DC, my husband had recently gotten a raise and we had software royalty income coming in. We were making more than we ever had before (something in the $80K range total). Overjoyed by our larger income, I spent nearly a year around 2006-7 looking for a first house, only to discover that there was nothing available in the under-$400k range in suitable locations. Feeling that it was stupid to struggle so much while making more than we’d ever dreamed of, my husband took a job offer in Texas. (And we’re really lucky we didn’t buy in one of those marginal neighborhoods in MD I used to look at–last time I checked, their property values had cratered.)
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I used to do stuff like going out to see a $399k house in Alexandria, VA, only to find out that 1) it was in a very iffy neighborhood and 2) across the street was the blank face of a concrete Metro fence (maybe even including some barbed wire). It was close to the Metro station, though. I went to see another house in MD priced at $430k or so and very close to an excellent public elementary. The reason for the low price turned out to be that there was a huge water tower on the neighboring lot looming over it. For that one, the realtor didn’t even bother to show up for our appointment (believe it or not, when I called, he wanted to give me the code for the lockbox and have me look at it myself).
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One of my local friends complains about the snobby $80k-a-year moms at the ritzy preschool her kid used to go to in our town in Texas. I guess the plumber’s wife was especially unbearable.
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In Northern Virginia, the real issue is that frequently the so-called community helpers (teachers, fire fighters, policemen, etc.) cannot afford to live in the communities they are helping. That was the point of the bid to create subsidized housing — so that the teachers and fire fighters could actually live in the communities that they served. Even though I’m politically conservative, I”m very much in favor of this initiative. It only makes sense. (On the other hand, you have to wonder what kind of a community doesn’t pay its community helpers enough to live in its community.)
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And one more thing — Gretchen Rubin, who wrote that ridiculous book about how to be happy, and who writes in all the women’s magazines, including Oprah — is actually married to a hedge fund manager. The reason she has so much time to worry about the perfect vase for her perfect flowers on her perfect desk that makes her oh so happy — is because other people take care of her children, take them to school, etc. Just saying . . I think a lot of her happiness actually comes from not being stressed and not being poor, which she never seems to admit.
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I have no idea how I would spend $75k a year, if I were a single lady.
Better wine, better restaurants, and pretty soon you’ve spent it. Even if you’re a beer type, you can start drinking Dogfishead 120 minute IPA at $12/120z bottle.
he wanted to give me the code for the lockbox and have me look at it myself
You should have passed that one to so would-be squaters, or started squating yourself!
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Not being poor does not mean automatic happiness.
American wife of £5bn Tetra Pak heir is found dead at London home after suspected drugs overdose and husband arrested
http://www.dailymail.co.uk/news/article-2171536/Tetrapak-heir-arrested-American-wife-dead-London-home-suspected-drugs-overdose.html
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“Better wine, better restaurants, and pretty soon you’ve spent it. Even if you’re a beer type, you can start drinking Dogfishead 120 minute IPA at $12/120z bottle.”
I’m not a drinker and I’ve gotten used to good, inexpensive dining (like Panera’s or better Asian places). I don’t think I could spend $20 or $30 for a dinner for myself and feel that it was twice or three times as good as a $10 dinner.
I guess it would have to be travel.
“You should have passed that one to so would-be squaters, or started squating yourself!”
Whatever that Realtor was being paid, it was too much.
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Amy P,
Again, depending on where you live, $20-30/diner is considered fairly budget for a larger city, especially with tax and tip included. In Chicago (pretty cheap as far as large cities go), a $20 meal -15% tip & 11.5% tax = $14.70. There are cheaper places out there, but not that many which aren’t fast food, especially if that total includes a drink. If you drink alcohol, a glass of wine or beer would set you over that number in all but the very cheapest places. I saw a statistic somewhere showing that alcohol prices at bars have increased significantly (40%?), and in liquor stores have decreased by some amount (maybe 15-20%?). Anyways, not really relevant to your comment, but I thought it was interesting.
(On the other hand, you have to wonder what kind of a community doesn’t pay its community helpers enough to live in its community.)
Gee, I dunno. Maybe one with conservatives who don’t want to pay taxes?
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“Again, depending on where you live, $20-30/diner is considered fairly budget for a larger city, especially with tax and tip included.”
Oh, I know. Even as a single person you could make $75k go up in smoke in NYC pretty fast without half trying.
“Gee, I dunno. Maybe one with conservatives who don’t want to pay taxes?”
Those communities where police or teachers can’t afford to live are practically never conservative hot spots. It’s usually ritzy blue coastal areas.
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The nice thing about Pittsburgh is that if you hit the specials, you can get drunk enough to beat the legal driving limit*, tip well, and only be out twenty.
*I realize that it isn’t technically a contest but if the state is going to define “drunk” I’m going to at least acknowledge the definition.
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“Those communities where police or teachers can’t afford to live are practically never conservative hot spots. It’s usually ritzy blue coastal areas. ”
Um, not actually true. There’s a reason why Barney Frank decided to retire. My town got redistricted into his district. Bielat’s a moron and probably wouldn’t have won, but Barney didn’t need the stress. He’s 72, after all.
We have a lot of teachers who live in our town, but also a lot who live in a neighboring, cheaper community. There used to be a deal where teachers’ kids could go to school in our district, but blah blah overcrowding blah blah. (This is related to the whole residency paranoia I find so distasteful.)
On Long Island, it’s not town-based. It’s a county police force. And the situation is actually flipped. The Nassau and Suffolk County PD jobs are plum jobs but hard to get. There are an awful lot of NYPD officers who live in either Nassau and Suffolk County, and they’d love to work there, too. The pay is higher, the commute is shorter, the danger is less. But there are fewer jobs, so they all work in the city.
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Wendy,
Compared to non-coastal, non-NE parts of the country, your area probably does look like a “ritzy blue coastal area.” What’s median household income and median housing cost? Our local hotsy totsy suburb has a median household income of $70k (the Texas median is $48k). Meanwhile, the median home in that suburb is $172k (while the median Texas home costs $126k). Interestingly, in both cases, the median home costs roughly 2.5X the median income.
The Darwinian struggle for survival that is so typical of middle class life in much of the coastal US is really hard on people with moderate incomes.
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What I’m saying is that my town is conservative compared to the true Democratic strongholds. Barney Frank gets elected in SE Mass because of the population of Fall River and New Bedford. Btw, Fall River and New Bedford are urban areas, highly blue. Not very ritzy.
I was just looking at a NY election map, focusing on MA. Plymouth County had the smallest percentage of voters for Obama (my county wasn’t the lowest–who knew). Plymouth County, home to many well-off coastal towns like Hingham (home of Marc Brown, author of the Arthur books). Heck, even the inland towns are well-off, like Lakeville.
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