There’s no question that many Americans are currently living paycheck to paycheck; it’s common and isn’t a problem that just exists in low-income households. Even high-income earners are living above their means and often are just one paycheck away from financial disaster. This leads many to believe that their problems would be solved if we just had more money in the bank, but is that true? Does money really make you happy, or is there more to it?
Does Money Really Make You Happy or is There More To It?
United States Cost of Living
Having enough to get by has drastically changed in the last few decades; the cost of living has skyrocketed over the years, and earning a “living wage” from one source of income is almost impossible in some regions. Meeting your basic needs when it comes to food, housing, transportation, and healthcare without going into debt or relying on public assistance is almost impossible for most Americans, even for those who make a decent income. So many Americans today are struggling to just “get by.”
Getting By Around the Country
Getting by depends, of course, though, on where you live and the size of your family. In some parts of the northeast, for example, a family of four would need approximately $135,000 per year for basic living expenses. Rents can be over $3,500 per month, and childcare costs are equally exorbitant. In some southern states, that same family would need around $89,000 to meet their yearly needs; though that number, of course, increases to approximately $100,000 in cities like Atlanta or Charlotte. Of course, often salaries and incomes are relative to the cost of living, so people in the northeast may tend to earn more than those living in the south, but that is not always the case.
Most Expensive vs. Least Expensive Regions
For families living on the West Coast, San Francisco in particular, a family of four would need approximately $157,000 just to break even. Rents can cost around $4,000 per month, making it one of the most expensive areas to live in the country. The Midwest is the most affordable region of the country, requiring just about $80,000 annually for a family of four to survive.
How are People Making Ends Meet?
Given the high cost of living essentially everywhere, how are people making ends meet? Well, for many, it’s a fine line between using the proper financial strategies and sacrificing when they need to. Most American households carry about $6,000 worth of consumer debt, and they’re not using their cards to go on vacation. Most of that debt is being spent on everyday living expenses like groceries and gas to get back and forth to work!
Many families try to maintain strict budgets to help make ends meet by using coupons and waiting for sales to make big purchases. Thrift stores, Poshmark, Facebook Marketplace, and Buy Nothing Groups have taken off in recent years because people are stretched so thin. Many opt for “no spend months” to get them through difficult patches, and others reach out to the amazing resources in their community, like food pantries. Making ends meet in America is a balancing act for so many and one that can put significant stress and anxiety on families.
Does Money Really Make You Happy?
So, the question of the day: does money really make you happy? This is one of the great questions of our time. Money can’t buy happiness, but it can provide a sense of freedom that can relieve stress and improve emotional well-being. And, when you factor into it that “health is wealth,” well, there’s your answer!
A 2021 study showed that happiness increases with wealth, but only up to a certain point. Once basic needs and simple comforts are met, the impact of money and the happiness it provides wears off. This might be why millionaires and billionaires are taking ridiculous risks diving to the depths of the ocean or flying to the edges of the earth; to get that sense of thrill and excitement back, since they have everything else.
So in a nutshell, money might not necessarily make you happier, but it does reduce stress. The peace of mind that comes from knowing you can cover a new set of tires when you need one, or have the ability to pay for a new dishwasher or washing machine when the old one dies, is a great feeling. This creates emotional stability because you know you won’t have to take on debt in an emergency.
But money will not eliminate problems; the problems just change (or often are bigger). Having more money in the bank or a higher income means there are bigger and greater expectations out there for you. There’s more pressure, and sometimes it even means you’re working more. You’ll have more to take care of and more responsibilities. Financial success can also mean stress, especially when dealing with the “lifestyle creep,” when you feel you need to buy and do more to keep up with everyone else.
What Does Wealth Mean To You?
The question, does money really make you happy depends on what happiness means and, essentially, what wealth means to you. For some people, it’s a certain dollar amount in the bank or investments, but for others, it can mean knowing that you have “enough” and everything is going to be ok if an emergency were to occur.
It boils down to freedom really. Money may or may not make you happy for sure, but it can create conditions where you can be happy. You’ll have more options and more time, and energy to focus on what truly brings happiness. Not to mention, when you’re not stressed, you feel healthier and that in of itself is wealth.
