QOTD #63: How much $ is enough?

How much money is enough?

For right now, in your current life, what annual take-home quantity of cash would allow you to live a life that you find comfortable? Is there one?
Aside from inflation, has this changed in the past decade?
What luxuries would you indulge in if you had a bit extra?

This has been on my mind often in the past few months. I really wonder just how much is enough. Is it ever really enough? Economics says "no", that desire always exceeds income... but does it?
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We make more money now than we ever have. We are net positive every month. Yet we're not saving as much toward retirement as we'd prefer, and we don't have extra to save toward those home improvement projects that are on our minds.

It doesn't bother us much that we can't have it all, and certainly we have lived with less... but... it leaves me wondering. $40K was enough for us 10 years ago. We were able to live off half of our income and save the rest. But now that we're making about $80K and have 2 children, we aren't saving half anymore. And that shocks us. Has inflation really changed that much in 10 years?

I look back at my food budget from 2001, and I see that I spent between $50-$70/month to feed myself. Just me. Now for our family of 5 (GM, Tt, AP, 2 young kiddos), we spend closer to $250/week. I guess that's not too much, but I'm constantly wondering how I could trim that down without reducing quality. I keep reminding myself that I'll never be able to feed my whole family on the strict budget that I used to have for just me. But at the same time, I enjoy pinching pennies, and this is presently our biggest negotiable line on our family budget.

 

Great subject, and one I've thought of lately too. We are basically conditioned, from the time we are little kids watching cartoons, to want consumer items and to spend money. The more money you make, the nicer things you have, the more you are exposed to that is just a *little* nicer/better/newer than whatever it is you already have. I do an okay job of throwing money into my 401k and IRA, and have a few months' worth of basic expenses socked away in an investment account I could easily liquidate in an emergency, though I should have more. I also have a motorcycle and a few other "toys" that I could liquidate for a decent chunk of money if I needed to. If you told me in my late teens or early 20s I'd have that, and have the income I do now, I'd think everything was awesome. Instead I still worry about certain bills and expenses, mostly because I splurge on unnecessary things too often. I need to crack down on that more.

 

I don't think it's so much that there's a specific dollar amount that is enough for everyone all the time. I think mentality plays into it a lot.

I was very poor when I was younger. Some months I went without phone service because I couldn't afford the bill. Back then the idea of making $50k per year or more seemed like fantasy. I make more money now than I imagined would ever be possible back then but I don't think it's made me substantially happier, to be perfectly honest.

I try not to be too materialistic. Oftentimes I will wait a few days or even a week before I make a purchase. Often I find that after the initial excitement wears off I don't need or want whatever it was I was coveting after all.

Food is difficult. I often find myself spending more on our groceries than I really want to but I have difficulty identifying places where I can cut. I think that's just always a bit of a struggle.

But all of that said I do think there's a point where more money doesn't really bring more happiness, at least for us. We don't need or want a lot of expensive toys. The occasional video game console or new electronic toy for me, mostly. I don't really need or want some fancy car. We don't travel and we don't have expensive tastes. Past a certain point there's not a lot to be added in terms of quality of life, I think. We're not quite there now since we're still on just my income, but we're not too far from it.

There's also a rather famous study on this subject.

Some might dispute it but it seems more or less correct to me. The exact dollar figure might be more or less than $75k depending on your local cost of living but I do definitely think there gets to be a point where money doesn't really provide as much of a benefit. Diminishing returns and all. Conversely, it is impossible to buy yourself out of unhappiness.

I wonder how happy Kanye West is these days.

 

I live below my means. People think we live a fabulous life. Meanwhile, I do my own version of coupon clipping and freebies.

I don't have an amount. I always live below what that income is. Sometimes with a large income, we play stress tests to make sure we can downsize and it not be painful. We've done that for extended periods to no ill effect. We splurge once in a while. Even then, we forget to.

 

Our expenses have expanded this year as we needed to get out of our crummy apartment, and our car died. Even so, we save money, about a fifth of our income. But the problem is that if we had children, that extra money would evaporate. Childcare is expensive and between that and student loans, well, we wouldn't have a lot left over. I'm trying to eliminate some of our higher interest debt to buy us some wiggle room. We'll see.

 

Money equals options.
Beyond a certain comfort.

I can easily go without. I can do with no fuss.
...nor do I want to maintain what I have (people forget that...care comes with having things...total cost of ownership, including your time, sanity and effort)
Names aren't important...unless they truly mean quality, without going overboard on cost.

So I use my money to enjoy life, give to others...not in charity, but to make them smile & experience.
I enjoy others' pleasure.

My charity is time & effort...money is not wasted on administration & corruption.

My time is short here on Earth.
I want to live it.
Having things, other than for function or memory is not worthwhile.
And the things I do have...they all have a purpose and symbolize something.

Even my car, which is not cheap...serves a purpose. Even in business or other interests.
It takes me places. I experience and enjoy the ride. It is a part of who I am and what I do.
I do not have just to have.

That being said...I do enjoy making a decent amount.
Again, it's options and flexibility.
If you don't have as much...you don't have as many options.

Even if I win the lottery...or become rich otherwise.
I'd DO things with it.
Create.
And share those creations.

 

Beautifully written.

 

For me, it depends on how you look at it.

If you look at it by household income, it's currently enough to sustain a reasonable standard of living in a relatively expensive city and neighbourhood (in midtown Toronto). I'm a freelancer, so depending on how my year goes, our gross annual household income will fluctuate between $105,000 and $120,000 a year. It would, however, have to increase to $130,000 and above if we want to pay down our debt more quickly.

This comes to the other perspective. If you put my SO's income aside (salaried with benefits), my income fluctuates between $25,000 and $40,000. I need to make between $35,000 and $45,000 to consistently down my current debts at good pace. In other words, I have to start pulling more than $35,000 a year consistently to keep my debt elimination going. I do have to start saving for retirement sooner rather than later.

I guess all things considered, somewhere between $130,000 to $140,000 household income would be enough for the long term. Once we get closer to being debt-free, that might change.