How much money is enough?
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It doesn't take much to make a dog happy
How much would your annual income need to be before you feel "comfortable"? How much would it need to be for you to feel rich?
Ironically, some days I feel more rich than comfortable. I live with roommates that make a lot less money than I do, and I don't have the money shortages they do. But I think I would need to spend five times more on rent to really feel "comfortable" about where I live.
I could go out tomorrow and pay two times as much for a nice, quiet one-bedroom apartment, still close to work. But I have a dog, and in order to both live without roommates AND have someone to let the dog out, I'd want to rent a house with a yard, plus have enough money to pay for someone to take the dog on an afternoon walk (since busy season requires being away from home for over 12 hours a day quite often.) Being able to afford that would make me feel comfortable.
I think "comfortable" is when any extra income you earn stops going to improve your housing, or allowing you to eat out or attend entertainment events as much as you want. Depends on what your needs and priorities are, of course.
For me, any extra income I get, I'm torn between saving for retirement/future down payment, and paying for more expensive rent somewhere. The problem is, salary jumps right now are not enough to pay for my ideal situation - yard + dog walker, but interestingly, the cheapest situation (sharing a house with roommates), is the next best choice right now.
I'd feel rich if I could add the international trips - the difference is, I would happily sacrifice the trips to have a more comfortable daily living situation, so once I can afford those, they will be an added perk.
This oft quoted study found that up to $75,000 in income, money DOES buy happiness - I think that this level is often where you hit the "comfortable" threshold, where you are content with your car, your home, and being able to afford some entertainment when you want it.
I think at a $75,000 salary in Atlanta, I could be very comfortable with my life. In San Francisco, where I think I'd like to live someday, I probably wouldn't be able to afford the same level of comfort (or freedom from stress). So in Atlanta I can be comfortable, but to be comfortable in San Francisco, I'd have to be rich? haha.
What level of income do you think you would be content with? What would it take so that bills and unexpected car repairs don't stress you out? So that you can live in a home that suits your needs?
Photo by Hitchster on Flickr - not my dog!
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October 25th, 2011 - 07:41
I ran the numbers the other year and we need 120K minimum to live ok in SF. Much more if we were to buy instead of rent. As housing prices go back up in SF we’ll need more than that. We can handle lower quality housing in SF than in other places because of the outside amenities.
Trying not to make a quality of life comment about cats vs. dogs…
Nicoleandmaggie recently posted..Are all bloggers who are mothers mommy bloggers? Also: how do you feel about the term mommy?
October 25th, 2011 - 09:03
I like cats too, but part of why I got a dog was to get me out of the house more – and it worked. I am much more interested in outdoor activities these days.
If my BF and I lived together, and he goes into private sector instead of further academia after he finishes his PhD, we could probably hit that $120k… Assuming we could find jobs there.
I wish I could buy into SF housing market now
, since if we do move, it won’t be for at least 4 years.
Kellen recently posted..How much money is enough?
October 25th, 2011 - 13:00
Interesting question! Although I have accumulated savings over the years, I do not think of myself as rich. Rich or wealthy is always someone else. I am comfortable with my earnings, but strive for more. It is probably because I do not know how long I will live. I guess $100K is min. because I put $34K in retirement savings. To feel rich, I would want a guaranteed $500K to $1 million.
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October 27th, 2011 - 11:50
I’d be content with enough income so that I could live with the basics, and save a significant enough amount for retirement and contingencies. The latter is important, as things can and do happen to people. I could have an income twice my usual expenses – thus, a 50% savings rate, I’d feel comfortable.
This is NOT the current situation
So clearly, I’m a ways from being comfortable based on my definition. I do think that many people find themselves feeling comfortable with much less, then quickly get uncomfortable if anything surprising happens. Ignorance might be bliss until stuff happens!
That being said, enjoy each day regardless of course, financial comfort or not.
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October 27th, 2011 - 17:57
I think this is such a difficult question to answer because I think the number varies wildly depending on what stage of life you are in. When I was in my 20′s I was paying off debt, saving for a house downpayment and for a car and all the rest of it. Now, although my housing and cars need is met, I have big looming college expenses ahead of me, so different kind of expense but still there, but if I didn’t have kids then I would need a lot less to feel comfortable than I do with them. So, yeah, right now, I might say $100K would make me comfortable, but in 20 years after all those expenses are behind me, maybe it’s $30 or $40K.
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October 28th, 2011 - 21:37
Everyone’s comfort level is different. For me financial comfort equals financial security. I dream to wake up one day and don’t worry about bills and savings and budgets. I think comfort brings freedom of doing thiings on your own terms. If you feel content with your choices, then it is your level of comfort.
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October 29th, 2011 - 11:01
Hard to say, isn’t it? What makes me comfortable wouldn’t work for others. I think if our job circumstances changed drastically, we could make arrangements to live quite comfortably on less than a $50K income, in a small mortgage-free house. It would be comfortable, but not ideal.
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October 29th, 2011 - 12:19
I think it is more of a state of mind than it is an actual dollar amount. If lifestyle inflation keeps up with your income then it will never matter.
“Once a luxury now a necessity”
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October 29th, 2011 - 12:56
True, but at some point, paying rent for a one bedroom in a “safe” part of town may be unattainable, whereas at a certain income level, at the very least you can have your own place in a safe neighborhood. Beyond that, I think I would call it “lifestyle inflation” but before that, you’re really just limited to some bad housing choices.