By Jinman Li
Whether money can buy happiness varies among individuals, contingent on their backgrounds and situations and how much money the person earns.
A 2017 study from Purdue University using data from the Gallup World Poll, which surveyed more than 1.7 million people from 164 countries, found that earning between $60,000 and $75,000 a year is ideal for what lead author Andrew Jebb called “emotional well-being” in a press release. The finding aligns with a 2010 research from Princeton University, which found that people’s level of happiness rises with their annual income when it is below $75,000, but the correlation does not exist beyond that point.
Nancy Ladd, a financial advisor at Trinity Financial Advisors LLC, said although money is not the driving force of people’s happiness, it does come into play, especially when it is below a certain amount, which, according to the research, is earning $75,000 a year.
“That’s really a minimum point where people basically start to feel that they can keep their head above the water,” Ladd said.
The research resonates with Alena B., a 28-year-old human resource worker for a financial company in New Jersey. She said making $75,000 a year is her goal because that is the amount the research found is needed to make people happy. Despite her desire for earning money, Alena describes her attitude toward consumption as minimalist.
“The more I have, the more I have to think about it. I always say if everything burns down, the less I have, the less I have to miss,” said Alena, who is originally from Bosnia and Herzegovina.
Alena is uncomfortable making monthly payments and would rather drive used cars and pay the bill immediately because she worries that once she fails to make the monthly payment, her car will be repossessed, she said.
The sense of insecurity stems from her not-so-well-off childhood and the Great Recession that deprived almost everything of the family, Alena said. Back then, Alena and her family had been living in the U.S. for 10 years and her parents worked hard to make ends meet. Alena was graduating from high school and about to go to college.
Then came the recession, when her father got laid off and then had a medical emergency, which took up all their savings. Alena’s mother picked up another job, her father recovered and the family got through the difficult time.
Alena then decided that she needed a safety net: savings that could keep her safe in case of a misfortune.
“You never know whether the economy is going to another recession. You are gonna be prepared for that,” she said.
Pat Terry, a 75-year-old freelance writer in Chicago, is influenced by family when it comes to money. Her father’s parents lived through the Great Depression, and her father dropped out of Harvard Business School because of the family’s financial situation. Terr said she went to work after school at the age of 14 because her father wouldn’t give her any money.
Terry has worked vitually nonstop the past several decades. Even when her two sons were little and she quit a full-time job to take care of them, she still took part-time or freelance jobs. “Ahead of the gig economy” is how Terry described herself.
Because Terry’s husband is now suffering from mild cognitive impairment, they sold their three-story condo in Lincoln Park to refinance a costly but convenient senior apartment at the Clare, a senior living community. Apart from continuing working as a freelance writer, Terry said she comes up with other ideas to make money.
“I’ve already made a proposal at the Clare to serve as a waitress for some of their events that need extra waiters, but they have to knock down my rents,” Terry said.
Lack of money for retirement is the issue that financial advisor Ladd is always facing with her clients.
“I’ve got clients that I’ve had to tell them at 70 years old that you need to go find a job at Walmart or Home Depot or something because you don’t have enough money to retire on,” Ladd said.
Robert Veeneman, 64, a former senior director of global marketing at Dolby Laboratories, retired two months ago and moved from California to Chicago. He felt grateful to retire at his age and owed it to the savings plans and the investment he and his husband made, Veeneman said.
New Year’s Eve is the financially big day for Veeneman and his husband, Robert, who has the same nickname: Bob. They usually have a discussion on the coming year’s budget plan and call it “the annual meeting of the Bobs,” where they go through the monetary details of expenditure projects such as travels, Veeneman said. The two Bobs revisit the plan every quarter and keep track of the changes, he added.
Income from real estate contributes a large portion to Veeneman and his husband’s investment revenues. They flip homes by buying houses that are in a poor condition, remodeling and selling them, Veeneman said.
“I’ve got some siblings who are gonna have to be working until they’re in their 70s,” Veeneman said. “If I hadn’t done the savings plan that we did, I probably would be in the same situation as some of them.”