Money Can Buy Happiness

By Mr. FrugalEnginerds

Before you grab the pitchforks and torches let me explain

At the FrugalEnginerds’ house, we live a blissful and luxurious life for much less than many typical American families.

Dude!!! You just told us that money can buy happiness, WTH!?!?

Many people associate money with happiness and in some ways they are correct. Money enable us to acquire things, leverage it to buy our dream home, allows us to travel the world, thus elevating our standard of living and happiness. It’s no wonder that money is one of the focal points in our lives. Why is it then that some of our family members, friends, colleagues and neighbors who have all these things and some are finding themselves unhappy, frustrated, and still complain about their jobs, kids, relationships, etc…? These people who are earning just as much money as we do or in some cases far exceeding us. The answer may lie with the study conducted by Princeton University in 2010.

Prince University’s Woodrow Wilson School: Income vs. Happiness Study

The study concluded that making more than $75,000 a year won’t increase your day-to-day happiness. After the $75,000 benchmark, your level of happiness is directly related to your temperament and lifestyle choices (location, number of kids, occupation, etc…).

Interesting Tidbit: The owner of Gravity Payments, Dan Price, recently increased all of his employees’ income to $70,000. A welcoming change I would imagine…but even more surprisingly, he reduced his own income down to $70,000. I wouldn’t be surprised if there are hundreds of “Best Boss Ever” coffee mugs wasting away on this desk.

The Takeaway

$75,000 isn’t a firm number when taking into consideration the varying cost of living from states to states. If one chooses to live along the West or East coasts, then this number will balloon to as much as $100,000, with the exception of Hawaii which comes in at an outrage figure of $122,000. On the contrary, if one chooses to live somewhere in the middle of the country, then this number will drop to as low as $65,000. One can make the correlation that once necessities are covered, such as food, shelter, clothing, and transportation, then everything else is just discretionary spending. This discretionary spending will either provide us with short or long term happiness.

 

HappinessAnnualIncomeBAR_CROP
$75,000 Benchmark

 

Long vs Short Term Happiness

Now a days, we focus on spending our money on things that provide us with long term happiness such as travels, healthy delicious food, vacations, experiences, etc…

So what do you consider as short term happiness!?!?

Short term happiness is generally consist of material goods that don’t bring added value to our daily life such as a fancy car, designer jeans, a new iPhone every year, and etc…

Going even further

If $75,000 is the benchmark for most Americans then surely engineers can even go further. Most engineers are notoriously efficient and economical, to which, coincidentally, the FrugalEnginerds happen to fall under these stereotypes. With optimization and careful planning we can easily reduce this number by tens of thousands.

When I didn’t know better

Nine and half years ago, straight out college, I bought a brand new fancy sports car, set me back a cool $36,000, and cost roughly $1,000 per month to run and operate. When I first laid eyes on this beauty, I knew she was the ONE, I was ecstatic as we drove off the lot. She was fast!!! So fast in fact, that I got a speeding ticket 2 months after I brought her home.

I tried to charm my out of the speeding ticket but the policeman was not having any of it. Set me back another $500 that month. Needless to say, there were a lot of BP&Js sandwiches and ramen noodles eaten that month.

As time went by the joy that felt that day at the dealership faded. Eventually she became just another car. Just another tool to get from here to there. Just another depreciating asset.

Nostalgia: A trip of Tijuana (TJ), Mexico

When I was in college in Southern California, a group of bored college friends and cousins decided to walk across the border to TJ for cheap thrills, tacos and beers. $10 goes along way down there. As we ate and drank our ways through TJ, one of my cousins overdid it, he passed out and unable to walk. We did what any other sensible group of drunken guys would do and put our “Compadre” in a shopping cart continued on with our adventure. Reminiscing about “poor college student” days always bring a smile to my face. I guess you can have a great time with just $10 and a shopping cart.

I always wonder what ever happened to that shopping cart and how many poor unfortunate souls get to inherit my cousin’s fate.

 

DEFINITION.

Phrase: “Poor College Student”

Pronounce: [pôr] [ˈkälij] [ˈst(y)o͞odnt]

Noun

  1. Person who eats 3 days leftover pizza.
  2. A couch surfer, who helps him/herself to YOUR beer.
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One thought on “Money Can Buy Happiness

  1. Pingback: Earn more, Spend Less and Invest! – FrugalEnginerds

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