They say that money can’t buy you love and won’t bring you happiness, but that is, up to a point, not true. You need money to be happy, to be in a relationship, to stay healthy. But how much money do you really need? I guess that this is where endless debates can start and cause sparks and fires and brutal executions (OK, maybe we won’t go that far).
Before I get to tell you how much money I need to be happy, let’s see why having enough money is extremely important to keep your happiness levels high:
– Money buys your house, food and medicine (when and if needed)
– Money helps you stay mentally sane by allowing you to get some items on your wants list (wanting is not the same thing as needing, but getting something that you want just for you, just to pamper yourself brings you a certain degree of satisfaction)
– Money helps you keep a healthy relationship and social life. One could argue that you don’t really need money for any of these, but look at most of the families that have money-related problems: they fight often, the stress levels are high and so on.
– Money helps you go visit places. Just imagine a life without being able to travel, a life that’s entirely spent in one place!
– Money pays your loans. Initially, I wanted to skip this because I personally have no loans, but most of us do. We all know how stressful they are and how apocalyptic not being able to pay your loans would be.
In the end, I guess that these are the core elements that are enough to bring you a decent level of happiness and that require money in order to make things happen. The good thing is that we don’t all need the same amount of money to make ends meet and be happy.
Where we live matters a lot in this equation, with things like Cost of living, mentality and habit playing an extremely important role. I personally believe that people in more developed countries like the US or Western European countries need more money do be happy.
To see if that’s the case, here’s how much money a Romanian guy with a wife and newborn son decided that it would be enough for him and his family to be happy:
$2,500 per month (or $30,000 per year)
It might sound very little for many and hopefully many would consider this amount way too high. For me (and my family), it would be enough to:
– Save a lot of money for emergencies and retirement here in Romania
– Eat high quality, healthy food and live a more than decent life here in Romania
– Save enough money for at least 1 amazing vacation per year, but most likely two
– Give me the chance of being a digital nomad and spend at least three months in another country, working and getting to know a new culture at the same time
– Buy all that is needed for our home and then have something extra to spend on things that I really want
I am fortunate not to have any outgoing loans and I really hope that I will never ever have to take a loan. This, combined with the fact that I am living in a country where everything is cheap, makes it for this apparently low number.
I say apparently, because I am sure that many Romanians would be happy if they earned a lot less than my ideal (and I actually wrote a post that it’s more than possible to live here on $1,500 per month and our last month’s total expenses were no more than $635.
So… what do you think? How much money do you need to be happy? And most important, if you’re not happy where you are right now, would you consider moving to a cheap country like Romania where your dollars would mean more?
[Photo by imaphotog]
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24 thoughts on “How Much Money Do You Need to Be Happy?”
Great post! I’m not sure we would consider moving to a cheaper country, due to being far away from family, but I do often think about moving to a cheaper house, etc. Sounds like $2500 a month over there would keep you in a pretty solid financial situation. Even with no debt, $2500 a month here would be just a bit over and above our basic living costs.
Just a bit over here (without debt and rent to pay) would be $1,000. But indeed, leaving family and friends behind would be really difficult for most of us.
If we didn’t have kids, I would totally move to a less expensive country. We could work on our website and make plenty of money for everything we need.
I personally don’t need a lot of money to be happy. But, the more the better since we would like to retire early.
I think that moving to a cheaper country and maybe a more exotic one (so not necessarily Romania) could become, in this case, a real option for retirement.
Interesting post! We both just quit our jobs in order for me to switch to self-employment, and him to go to school and flips cars (along with potentially some part-time work). Luckily we live in a super cheap area and this is actually do-able. So, we don’t need a lot of money in order to be happy.
Not to mention that you actually make quite a lot from being self-employed 🙂
I would not move either. I need to be closer to my family and I feel more comfortable in a place that I have grown up. Despite been in debt and struggling I am pretty happy now but always want more. I am happy with what I get but know I can do better so I guess it is hard to decide how much money would actually make me happy. As long as I can get what I need – I cope.
So in the end, our goal should not be to get rich, but to make enough to keep us happy 🙂
1500-2000/month is absolutely OK. Just as you said, it allows you to save a lot and also enjoy life. Sure, in Romania the ‘regular’ wage is around 300-500 bucks, so we’re talking quite a sweet life with such income 😀
Yeah, but travel in foreign countries is more expensive :)))
Great post! I guess living off of that much would be okayif you have a decent amount of savings.I personally wouldnt be able to because I really like having more money then I need.
The idea was to live off that without going into your savings 🙂 And it is possible in Romania and many other countries.
I just had this discussion with some friends and family and it’s an interesting discussion to have. I feel that most cultures, especially Western cultures, associate happiness and success with finances.
The crux of my argument was that when I’m sitting on the beach on vacation with my family I’m not saying “I’m having so much fun because I have X number of dollars in my bank account.” I’m sitting there saying “I’m so happy to be able to spend time with my family and loved ones”.
Now I know that money is what afforded us the opportunity to go on vacation in the first place, so maybe my argument is flawed. My rebuttal to that is we are just as happy sitting around the dinner table at home which doesn’t cost more than normal everyday life.
Thanks for reading and raising such an important topic for discussion!
That is a really nice way to approach this, Brent! I do agree that spending time with the loved ones is probably the best thing that you can do and you don’t need money for that. But going places… that indeed requires money. However, it’s not always a lot needed for going to the beach or other vacation.
I’ve never put a figure on it but I suppose I’d need enough to cover all my expenses, and enough to feel like I was saving for the future at a high enough clip that I could still reach FI in a short time (10 years or less). I suppose I could be happy on much less but I would have to come to terms with delaying FI for quite a while, maybe decades, and I don’t know how happy I’d be about that.
I’ve read some interesting info on only needing a very small amount (less than $20k annually ) to reach peak happiness but I think that omits financial goals that contribute to long term happiness (saving for higher education for one’s family, saving for retirement, travel, etc.)
Exactly! Long term happiness must be taken into account as well and everybody should do it – you can’t risk finding yourself close to retirement and with no money in the bank.
i enjoy traveling and living in Hawaii, this is the most expensive state in the US. My number is $9000 a month, which will allow me the freedom to do whatever I want to pursue.
Good to finally see a number. Pretty high for my standards, but the cost of living is what matters most here and I am sure that it’s a fair number.
That’s actually pretty close to my number too. I guess living in a smaller city in Peru has a comparable, though slightly more expensive, cost of living than in Romania. I don’t enjoy traveling for long periods of time (or the thought of living 3 months out of the country) like you do, but I’d still appreciate the ability to take 2 week long vacations a few times a year, whenever the batteries need recharging. Cheers to reaching our goals!
Cheers to that! I did hear that Peru is pretty cheap and your expenses are a little higher probably because you have to pay rent (we have no mortgage, we pay no rent otherwise we’d be at least a couple hundred dollars higher)
It’s hard to pick a number, but I think I’d probably need double the amount you mentioned. Mostly because rent itself in my neighborhood is about $2000 for a 2 bedroom. Housing is the most expensive expense here…I don’t think it takes too much money for me to be happy. I don’t even need to move out of the country to having a lower cost of living…out of the city would lower my costs!
Well, that’s the good thing about living in such an expensive area – anything else is cheaper. For me it would be very difficult to find a place with a lower cost of living without moving to a small African country, probably…
Interesting question! My number is the amount that allows me to save a little bit every month. When I only break-even I get nervous – I need to be able to save every month to be comfortable.
I guess that’s a good number, Kyle!