18 ms·

How much salary is enough? Apparently, $75,000/year

82 points by ca98am79 14y ago

jastanton 14y ago
I tried to trick myself once I started making more than 60K by splitting my direct deposit into checking and savings. Now every raise I get goes directly into savings and I try to live thinking that financially i've been in the same place as I have been for a while. It works fairly well but once you get married, buy a house, and have kids things change quite a bit. That all being said if you think that your salary correlates to your happiness then you're chasing the dragon.
- Retric 14y ago
  This actually get's back to why a lot of high salary people have issues with retirement. Suppose your salary doubled between 40 and 50, well your retirement savings have not changed but there is a huge temptation to live a little. Soon retiring on your old salary starts looking like a huge hardship and you end up working even longer vs. that ever so tempting early retirement.
- gyom 14y ago
  I don't make that much compared to many of the other people posting in this thread, but having an automatic deduction of some significant-but-manageable amount going to a separate account is definitely a nice trick to play on oneself.
dzlobin 14y ago
It certainly might be enough, but I'd imagine that you are delaying the worrying and stress for your retirement when you realize you saved $100k over 30 years.
727374 14y ago
Yep. Just times by three if you live in SF with a family.
- sp332 14y ago
  It might be $75k per person. Certainly +100% for a spouse and more for kids.
daeken 14y ago
$75k is a decent salary in most of the US, but if you're in NYC or SF, even his 20% variance (bringing it up to $90k) just isn't enough. If you want to save money, buy a house in the future, and have money to do things, then $120k is minimum in Manhattan, and $90-100k in most of the rest of NYC. Yes, you can live very cheaply in NYC, but at the expense of time; I personally don't want to travel for an hour or more to get to an office, myself. Saying that a salary is "enough" because that's where happiness flattens out is silly. Most people have no idea how to manage their money, stay out of debt, and prepare for retirement, so they're happy once their salary outstrips their immediate ability to spend.
- cm2012 14y ago
  You are extremely out of touch with the day to day reality of most of New York. One hour commute is really the norm, and people making 60,000 a year are on average quite comfortable here, all throughout Queens, Brooklyn, the Bronx and Staten Island. 75k is really comfortable. Rents for nice 2 bedrooms are from 1300-1800 within an hour of the city in really nice neighborhoods.
  - daeken 14y ago
    I'm well aware of what people do, but it's something I would never do unless I had absolutely no other choice. With a one hour commute, assuming 48 working weeks a year, that's 20 days of your year that are burnt just getting to and from work! My life means more to me than money.
    - jasonlotito 14y ago
      > My life means more to me than money. Do not assume that money is the reason for living an hour away from work. There are many reasons, including schooling, which is even more important with special needs children. I realize you didn't intend to say that, just making it clear however. =) On that note, don't also assume that an hour long commute means an hour wasted. As someone who makes that hour-plus long trek every day, I've learned how to fill that time. I'm a big audiobook fan, and because of the commute, I'm able to commit to reading a lot more than I would otherwise. On top of that, in the city, commuting becomes easier with public transportation. When I was living in Montreal, I could read more than just audiobooks. I'm not saying it's for everyone, but those days aren't necessarily burnt.
ashray 14y ago
I think this is best evidenced by my joy at payday. When I started out my website (about 13 years ago..), the first $25 payment really thrilled me! Eventually, I had bigger milestones. When I got to $100/month that was awesome! Then, we got even bigger. Now, even an extra $3000/month gives me a nice feeling but nothing much to be honest. I think money only goes so far. Once you're comfortable, it's only achievements and breakthroughs that can really make you happy. Case in point: A blog that I started recently got it's first money (around $120, and I was overjoyed!) :)
tibbon 14y ago
Living in Ohio on about that now. If It wasn't for relatively giant student loan payments (stupid private school... yes it was a poor idea), then yea... that's absolutely enough money for most places (not Boston, NYC, SF, DC, etc). The only real reason I'd like a bit more still is to offset those payments and allow a bit more travel.
purplelobster 14y ago
It's not about the salary, it's about how much you put away and how much you need to live on. I make about $80k after bonuses, not a whole lot in some places like SF or NYC, but I find that in Portland, I'm able to save 40-50% after taxes. I know that would change if I bought a house or had kids, but still.
- up_and_up 14y ago
  > I know that would change if I bought a house or had kids, but still. Understatement of the year, replies a man with wife, house and 3 kids.
  - purplelobster 14y ago
    Well, I'm hoping I'll be earning more by the time I have those things. And the reason I'm saving up right now is because I can. I rent a small studio, bought a 14 year old car etc. I'm guessing this will be the only time of my life when I can put away this much. I see many doing the opposite: getting a $1500 apartment and a new car when they get their first job.
- codegeek 14y ago
  This. Whoever reads this, please put it up on your wall/fridge wherever.
hippich 14y ago
My problem with this - I need money to do stuff I like. And only making stuff makes me happy. Solution to this is to be paid via what I do to make myself happy. I am not there yet, but I will I am sure.
lifeguard 14y ago
Once you cross the 70k mark, you can have almost anything you want. Sure, people can contrive lots of contra-examples in your replies. But the truth for real/average/majority of Americans is that level of income makes any toy/hobby/charity possible. It also caries with it dental, health and disability insurance. Being able to document 70k annual income offers almost unlimited credit if you have good credit and forgiveness if you have bad credit. But at that level one is an expert and if you do not get your fair market rate it means someone is ripping you off so you want your proper pay just as a matter of fairness.
- Evbn 14y ago
  In the US insurance isn't free. Credit is not unlimited, it is 3-5x income max. And income has to pay for retirement as well, unless you want to work until you die.
  - lifeguard 14y ago
    If you earn over 70k, benefits are always included. A few hundred a month employee contribution, but insurance is a non-issue. These benefits also include 401k of some sort, maybe even matching. If you don't work 1099, you acrue social security benefits. I submit one can get over $500k of consumer credit based on 75k income and existing good credit. Not a home loan, consumer credit like a Sears card.
pwthornton 14y ago
As has been discussed elsewhere, this slides a bit depending on where you live and I've seen charts that list how much you need to make for your market to be happy enough, but that's not germane to the overall point. It is ultimately true that money and things can't buy happiness. Life experiences, friends and family have a far greater affect on happiness. Going on a memorable vacation, for instance, will do more for your happiness than remodeling your home. There are several reasons why increased money doesn't necessarily make people happier: # Making more money often requires more time and responsibility. Neither tends to make people happier. If you have to spend more time working to make more money, you might be happier making less because you'll have more time to spend on your hobbies. # People tend to spend more money the more money they make, often in ways that don't make them that much happier. Making $150,000 a year? Time for you to buy a house fitting of a man who makes $150,000 a year! Even though, you might be happier living in a smaller, simpler house and a bigger house and mortgage means you may not be paying a lower percentage of your income towards housing. Or you might be happier with a smaller mortgage that doesn't require a $150,000 a year job to support (it's harder to find high paying jobs, which makes the threat of losing them more stressful). # One of the great keys to happiness and longevity is friendship. If making more money requires you to spend less time with friends and making friends, it won't make you happier.
- pwthornton 14y ago
  As for me, what would make me happier financially? Not having a mortgage would be number one. Well, wouldn't making more money help that? Yes, but the temptation for a lot of people would be to just get a bigger, more expensive place. This is why you'll find households in the 90+ percentile will mortgage payments late into life. Instead of paying off their mortgage faster, they get bigger houses, do remodeling and spend more and more on their houses. My wife and I might get a slightly bigger place when we have kids, but we'd like to be mortgage free by the time kids go off to college.
josephjrobison 14y ago
Does $75k mean pre-tax or post-tax? Post-tax comes out to $46,800 a year in California, that's $3,900 a month. Which is great, but yea when you start thinking about a wedding in the future and kids college, you're left with $900 a month to save for those things, granted you don't blow it on vacations and other activites. A sample monthly expense (doesn't apply to everyone, can be reduced by a lot by eating beans out of a can and walking 12 miles to work) If you're paying $1,000 a month in rent $100 in utilities $400 in groceries $100 eating out $100 clothing/supplies $400 car payment $200 gas $400 student loans $200 in credit cards $100 in misc. That's $1,300 left over.
- ShawnBird 14y ago
  > $100 in utilities That seems really low. I live in a small house and here are my utilities: Phone: $50 Internet: $60 Water/sewer/garbage: $100 Electricity: $80 (less in the summer, more in the winter) Gas: $10 And you left out mandatory insurance which is ~$150 for car + home. Total: $450/month
  - josephjrobison 14y ago
    Oh well I live with two roommates so $120 cable + $40 water + $60 electric = $220/3 = $73+. And yes auto insurance is something I forgot at another $100 :)
therandomguy 14y ago
Here is an almost bizarre theory. When your salary crosses the average number your enjoyment of things that you can buy with money goes down drastically. You have much more appreciation of the used car that you bought out of college as the monthly payments pinched you a little. A good way for you to maintain that effect is to keep stepping up your lifestyle as your salary increases. Constantly buying a little more than you can afford. You can easily afford a Honda now? Buy BMW. Goes against conventional wisdom, but food for thought.
- daeken 14y ago
  That's one of the things I do. Not generally with large purchases, but the $300 difference between a nice Dell panel and a Thunderbolt display is small and easily pays off in the "oh sweet, a beautiful new toy!" feeling that I get from it.
- cgmorton 14y ago
  My question is, what are you doing 'enjoy[ing] things that you can buy with money'? Hasn't it been well enough established that things don't make you happy? The Greeks figured that out two thousand years ago, guy! Let me tell you, I bought a used car just this year and I appreciate it way more because I didn't bankrupt myself to do so.
  - therandomguy 14y ago
    "Have you seen anyone sad on a jet ski?"
- patio11 14y ago
  One could envision a business built on providing a convenient wrapper for this strategy, where you sell young professionals functionally equivalent copies of the goods they purchased as college students, but charge three times as much for them. This would let you signal to the young professionals that they have "made it. (They'd probably also tsk-tsk about college kids buying things which cost X. I mean, sure, college kids don't have 3X, but isn't 2X the absolute minimum to know that it is safe for human consumption? Oh, college kids...)
ygmelnikova 14y ago
A society that correlates material wealth with happiness is shallow and deprived. Or have you never read Dickens?
dinkumthinkum 14y ago
Let's be honest, no matter where you live $75K isn't much. Even if you live in cheaper areas, it may not be poverty but it's certainly not happiness inducing wealth. Let's be serious.
- jonknee 14y ago
  You could live like a king on $75k in many places in the US. Pretty much anywhere far enough outside of a big city and that's not close to the water.
- Evbn 14y ago
  In Iowa it is plenty.
- rprospero 14y ago
  I completely disagree. I'm making $27k and that's more than enough to keep me happy. Sure, there's some niceties that that I could pick up with a $48k salary that would ease some stress, but I'm certainly not living like a miser. I'm seeing Joshua Bell in concert next week, my fiancee and I have two cars, and the we go out to eat regularly. Honestly, if someone can't be happy with $75k, I can't imagine that $75M would fix it. To prevent anyone from asking, yes, I'm living in the US.
  - dinkumthinkum 14y ago
    I don't want to upset anyone or anything but $27K is in the ball part of poverty. I'm glad you are happy that's fine -- everyone is familiar with the idea that money is not the only way to happiness. Simply because you are happy is not really much an indicator, let's be honest. I don't want to call you out, it's not my intention. Some people are perfectly happy to live an acetic lifestyle with no money in a mountain in Nepal. Perhaps you are similar in mindset, that's perfectly OK. But that's neither here nor there; it's anomaly. Because you both have cars doesn't speak to much; we don't know how they were paid, how old they are what happens if their's transmission, whatever. To compare $75K with $75M is almost hard to take seriously.
- dasil003 14y ago
codegeek 14y ago
It is enough as long as you can manage the following math: Cashflow in (net) > Cashflow out (net) It is that simple. Yes of course at $75K in NYC, your "cashflow out" variable needs to be lower than what it would be at $120K. So it is your choice. Make $75K in NYC but want to live in manhattan ? Sure, you can do that but your non-housing costs have to be significantly lower. Master that formula for life and u r golden. I have been doing it for years. My income has seen significant changes over past few years (luckily positive) but when in confusion, I use this formula time and time. Also, I love to discuss this with my wife whenever she says "we make so much money. Why can't we buy X now"
- hudibras 14y ago
  Somebody's been reading David Copperfield. "Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."
  - codegeek 14y ago
    funny but this is something that sounds so trivial once someone says it. Most people however overlook this simple formula because they use emotions rather than brain.
drharris 14y ago
This is not too far from my own salary in a rural-ish area, my wife making half that as a teacher. We budget and manage our money carefully, and are indeed happy; we never disagree about money. When I was in major debt, I found I was constantly stressed and on the edge. Once it got paid off, I felt free. I have a mortgage and student loans (and a year left on a car note), but it's just a monthly payment with low interest. Even with a second child on the way, I don't feel worried; it won't be easy, but it's definitely manageable. One of the biggest mistakes I make is seeing people save for their kids to go to college. Not only can you barely beat inflation (if not for the tax benefits), what happens when your child wants to major in Psychology? I treat college like an investment; for some careers it's appropriate, others not. If it's appropriate, then you should be able to take out loans that can be repaid in 5-6 years. If the career they want does not allow for that, then some better decisions need to be made. Nothing wrong with skilled trade these days. My only worry (and it doesn't keep me up at night) is with retirement. I save probably 10% toward that, with 11% returns the past few years (I know, right?), but even at that rate I won't really be able to retire until my late 60s if I want any sort of decent life. I'm working now on trying to save more so that maybe I can retire earlier. In the end, I believe unhappiness with money has more to do with debt than income. I'd imagine the results are skewed because people making $75k may also tend towards less debt. I imagine those making half that amount would be plenty happy if they had no debt to worry with.
Evbn 14y ago
Does this article talk about regional variance of cost of living? Saving for retirement? Raising kids? Or is it the quarterly blogspam repost of a poorly structured survey from many years ago?
- dmazin 14y ago
  The main discussion of the article consists indeed of the things you mentioned.
- kylemaxwell 14y ago
  You could always RTFA and find out, you know.
cantastoria 14y ago
Call me paranoid but I always feel like these studies are being done to lay the groundwork to justify tax increases on the affluent. "You don't need to make that much, we've done research! $75,000 is all you need trust us, you'll be just as happy." Just a thought...
- joonix 14y ago
  These studies just want to cram everyone in America into one cliche stereotypical lifestyle. Have you seen the the lifestyle of the Average Joe? Diet of terrible, unhealthy processed foods and fast food. Chain restaurants like Applebees for a special night out. Overworked, with minimal employee protections and benefits. Limited traveling/vacation time. Living in isolated, distant suburbs with soul crushing commutes in traffic. I'm not knocking these types of people, but I doubt many on HN would be content with that standard of living. For that lifestyle, $75k/yr is more than enough. But I would hate that lifestyle, so $75k simply isn't enough.
tbatterii 14y ago
and if you're married and have kids..... multiply by 3 at least.
samstave 14y ago
I am so tired of this argument, and the only people here in support of such a statement, I feel, are the young single and childless. Take a divorce, child support, travel etc into account and I cannot live on anything less than $150K Rent for a house with several children, for me, is $2300 for a two bedroom with a garage, yard and an extremely lucky addition of a very large play room. I am REALLY lucky to have this place - as it would go for $3500+ if I move out.... The argument for less and less salary always sounds to me like peasants justifying their fealty, though at the same time - we should not be decrying arbitrary pay brackets - but demanding more fair pricing for all the tings that are required to survive and thrive. Everything is overpriced.
- sliverstorm 14y ago
  I think it is mostly a reaction to the people who publicly declare they are barely scraping by at $500k, and the new taxes will break them.
- cm2012 14y ago
  My parents raised my sister and I for 20 years on a civil servants salary (30-90 thousand over the time period). One hour from Manhattan, only he worked, and neither of us had to take debt for school.
- esrauch 14y ago
  I honestly thought you might be kidding at first, but it looks like you are serious. The vast majority of people who have divorced and pay for 2 kids are making far far less than $150K and they aren't starving to death. Only about 5% of households in the US make more than $150K/year; if you feel like you are scraping by with that much income then you must be buying a lot of things that you don't actually need.
  - samstave 14y ago
    I don't buy anything I don't need. I pay cash for everything and have no debt. But with a $2000 a month child support bill, full medical, $2300 rent, ~$500 in other bills, etc, I do not have much left at all after all my basic expenses. People think $150k is a lot on paper - but when you add everything up, it is not actually a lot.
Irregardless 14y ago
Well, at least he proved himself wrong by posting this link: "Yes, Money Does Buy Happines: 6 Lessons from the Newest Research on Income and Well-Being" http://m.theatlantic.com/business/archive/2013/01/yes-money-does-buy-happiness-6-lessons-from-the-newest-research-on-income-and-well-being/267016/ http://m.theatlantic.com/business/archive/2013/01/yes-money-...
jpdoctor 14y ago
> When did a millionaire become a working class stiff? 1990s, so not exactly news to anyone familiar with inflation. The expression is pre-1980s really. Put $1M in an inflation calculator for 1975, and you'll find that equates to about $7M now. It makes sense: You'd live very well off of interest from $7M.
hhuio 14y ago
I make more than double that and I still can't afford a house here :(
byjess 14y ago
You can also divide that by the number of mouths you have to feed.
maxharris 14y ago
"Enough" perhaps for an average person, with average ambition (far below what it ought to be) and ability, living in an average house, in an average town. Which describes no one and nowhere.
honu 14y ago
One premise the author stated is "cutting your spending rate is much more powerful than increasing your income". The idea seems to be that this both increases one's ability to save while also lowering the bar for current and future expenses. Many people could benefit from taking a hard look at their expenses and trying to find areas to cut. That being said, taking this orientation has its limits. First, there is a floor to how much savings one can make on a given lifestyle. Additionally, the upside potential is limited if a lot of time and effort is spent on trimming expenses. Some folks, especially the type of folks who frequent HN, have substantial opportunities to increase their income (e.g., through freelance work) that often suggest that increasing income is MUCH more powerful than cutting one's spending rate (I think patio11 has mentioned something like this). Often times the equivalent of one or two hours of tech consulting can cover the cost of many "unnecessary" conveniences that save one time and/or effort. Additionally, it's much more scalable -- that is, the upside of saving more of an increased income frequently has more upside potential than cutting costs. Of course, not everyone can do tech work, and even tech workers will probably need to adjust their spending to a lower level once they are on "fixed income", but I think these lines start to stray from the central issue. As for startups, I think a holistic approach to assets and resources needs to be considered. Specifically, often the scarcest asset is founder time, so spending money to save founder time is often an <i>extremely</i> prudent choice to make in terms of adding value to the company.
pfedor 14y ago
So never mind that there are other studies which point to different findings. More importantly: the study finds that money above $75k has no impact on "Emotional Well Being = the quality of a person’s everyday experience such as joy, fascination, anxiety, sadness, anger, and affection" however at all levels more money improves "Life Evaluation = a person’s thoughts about his or her life (on a longer time scale)." How have we decided to call the first one "happiness" and not the second one? Maybe that's how the psychologists define happiness, but it's not the everyday meaning of the word as I perceive it. Granted, English is not my first language but I would say "happiness" includes both "emotional well being" and "life evaluation", and maybe even with more emphasis on the latter when contrasted with, say, "joy" which is the one that pertains more to the short-term states, isn't that right? As a concrete not money-related example, parents of young children probably typically don't have very good "emotional well being" as defined above, but nevertheless by every account I've heard they're usually very happy, which means precisely their "life evaluation" is high.
jinushaun 14y ago
Reading the comments on here, it's incredible how many on HN don't realise how privileged they are. $75,000 is a lot of money, even in NYC and SFO, and the people who think otherwise are probably single 20-30 somethings that insist on living by themselves. Traditionally, children lived with their parents, even after marriage, until they can afford to live on their own. There are millions of people in America living in much less than $75k per year and doing just fine even in the big cities. (Otherwise, there wouldn't be a "bad part of town") My parents raised three kids on less and they now own a house and two cars. People in higher incomes forget that there is an entire other country of people who make much less money than they do. 72% of households in the US live on less than $75k. In Manhattan, median income is $65k! There is living breathing proof of people living below these numbers everyday. These aren't unicorns. It's not rich, but nor is it poverty, which is defined as $11,500 in NYC for an individual. Truth of the matter is, if I made $75k, I'd have a $75k lifestyle. If made $150k, I'd have a $150k lifestyle. Even if I made $1M per year, I'd have a million dollar lifestyle and probably still feel poor. I'd drive a more expensive car, buy more expensive groceries, live in more expensive housing, eat at more expensive restaurants, wear more expensive clothes, have more expensive hobbies and take more expensive vacations. What this article claims is that past the magical $75,000 mark, we are as poor as we allow ourselves to be. Saving money and not building debt is very hard to do for most people. It's a fact of life that people like to live beyond their means. I know I do.

82 points by ca98am79 14y ago

I tried to trick myself once I started making more than 60K by splitting my direct deposit into checking and savings. Now every raise I get goes directly into savings and I try to live thinking that financially i've been in the same place as I have been for a while. It works fairly well but once you get married, buy a house, and have kids things change quite a bit. That all being said if you think that your salary correlates to your happiness then you're chasing the dragon.

Retric 14y ago
This actually get's back to why a lot of high salary people have issues with retirement. Suppose your salary doubled between 40 and 50, well your retirement savings have not changed but there is a huge temptation to live a little. Soon retiring on your old salary starts looking like a huge hardship and you end up working even longer vs. that ever so tempting early retirement.
gyom 14y ago
I don't make that much compared to many of the other people posting in this thread, but having an automatic deduction of some significant-but-manageable amount going to a separate account is definitely a nice trick to play on oneself.

dzlobin 14y ago

It certainly might be enough, but I'd imagine that you are delaying the worrying and stress for your retirement when you realize you saved $100k over 30 years.

727374 14y ago

Yep. Just times by three if you live in SF with a family.

sp332 14y ago
It might be $75k per person. Certainly +100% for a spouse and more for kids.

daeken 14y ago

$75k is a decent salary in most of the US, but if you're in NYC or SF, even his 20% variance (bringing it up to $90k) just isn't enough. If you want to save money, buy a house in the future, and have money to do things, then $120k is minimum in Manhattan, and $90-100k in most of the rest of NYC. Yes, you can live very cheaply in NYC, but at the expense of time; I personally don't want to travel for an hour or more to get to an office, myself. Saying that a salary is "enough" because that's where happiness flattens out is silly. Most people have no idea how to manage their money, stay out of debt, and prepare for retirement, so they're happy once their salary outstrips their immediate ability to spend.

cm2012 14y ago
You are extremely out of touch with the day to day reality of most of New York. One hour commute is really the norm, and people making 60,000 a year are on average quite comfortable here, all throughout Queens, Brooklyn, the Bronx and Staten Island. 75k is really comfortable. Rents for nice 2 bedrooms are from 1300-1800 within an hour of the city in really nice neighborhoods.
- daeken 14y ago
  I'm well aware of what people do, but it's something I would never do unless I had absolutely no other choice. With a one hour commute, assuming 48 working weeks a year, that's 20 days of your year that are burnt just getting to and from work! My life means more to me than money.
  - jasonlotito 14y ago
    > My life means more to me than money. Do not assume that money is the reason for living an hour away from work. There are many reasons, including schooling, which is even more important with special needs children. I realize you didn't intend to say that, just making it clear however. =) On that note, don't also assume that an hour long commute means an hour wasted. As someone who makes that hour-plus long trek every day, I've learned how to fill that time. I'm a big audiobook fan, and because of the commute, I'm able to commit to reading a lot more than I would otherwise. On top of that, in the city, commuting becomes easier with public transportation. When I was living in Montreal, I could read more than just audiobooks. I'm not saying it's for everyone, but those days aren't necessarily burnt.

ashray 14y ago

I think this is best evidenced by my joy at payday. When I started out my website (about 13 years ago..), the first $25 payment really thrilled me! Eventually, I had bigger milestones. When I got to $100/month that was awesome! Then, we got even bigger. Now, even an extra $3000/month gives me a nice feeling but nothing much to be honest. I think money only goes so far. Once you're comfortable, it's only achievements and breakthroughs that can really make you happy. Case in point: A blog that I started recently got it's first money (around $120, and I was overjoyed!) :)

tibbon 14y ago

Living in Ohio on about that now. If It wasn't for relatively giant student loan payments (stupid private school... yes it was a poor idea), then yea... that's absolutely enough money for most places (not Boston, NYC, SF, DC, etc). The only real reason I'd like a bit more still is to offset those payments and allow a bit more travel.

purplelobster 14y ago

It's not about the salary, it's about how much you put away and how much you need to live on. I make about $80k after bonuses, not a whole lot in some places like SF or NYC, but I find that in Portland, I'm able to save 40-50% after taxes. I know that would change if I bought a house or had kids, but still.

up_and_up 14y ago
> I know that would change if I bought a house or had kids, but still. Understatement of the year, replies a man with wife, house and 3 kids.
- purplelobster 14y ago
  Well, I'm hoping I'll be earning more by the time I have those things. And the reason I'm saving up right now is because I can. I rent a small studio, bought a 14 year old car etc. I'm guessing this will be the only time of my life when I can put away this much. I see many doing the opposite: getting a $1500 apartment and a new car when they get their first job.
codegeek 14y ago
This. Whoever reads this, please put it up on your wall/fridge wherever.

hippich 14y ago

My problem with this - I need money to do stuff I like. And only making stuff makes me happy. Solution to this is to be paid via what I do to make myself happy. I am not there yet, but I will I am sure.

lifeguard 14y ago

Once you cross the 70k mark, you can have almost anything you want. Sure, people can contrive lots of contra-examples in your replies. But the truth for real/average/majority of Americans is that level of income makes any toy/hobby/charity possible. It also caries with it dental, health and disability insurance. Being able to document 70k annual income offers almost unlimited credit if you have good credit and forgiveness if you have bad credit. But at that level one is an expert and if you do not get your fair market rate it means someone is ripping you off so you want your proper pay just as a matter of fairness.

Evbn 14y ago
In the US insurance isn't free. Credit is not unlimited, it is 3-5x income max. And income has to pay for retirement as well, unless you want to work until you die.
- lifeguard 14y ago
  If you earn over 70k, benefits are always included. A few hundred a month employee contribution, but insurance is a non-issue. These benefits also include 401k of some sort, maybe even matching. If you don't work 1099, you acrue social security benefits. I submit one can get over $500k of consumer credit based on 75k income and existing good credit. Not a home loan, consumer credit like a Sears card.

pwthornton 14y ago

As has been discussed elsewhere, this slides a bit depending on where you live and I've seen charts that list how much you need to make for your market to be happy enough, but that's not germane to the overall point. It is ultimately true that money and things can't buy happiness. Life experiences, friends and family have a far greater affect on happiness. Going on a memorable vacation, for instance, will do more for your happiness than remodeling your home. There are several reasons why increased money doesn't necessarily make people happier: # Making more money often requires more time and responsibility. Neither tends to make people happier. If you have to spend more time working to make more money, you might be happier making less because you'll have more time to spend on your hobbies. # People tend to spend more money the more money they make, often in ways that don't make them that much happier. Making $150,000 a year? Time for you to buy a house fitting of a man who makes $150,000 a year! Even though, you might be happier living in a smaller, simpler house and a bigger house and mortgage means you may not be paying a lower percentage of your income towards housing. Or you might be happier with a smaller mortgage that doesn't require a $150,000 a year job to support (it's harder to find high paying jobs, which makes the threat of losing them more stressful). # One of the great keys to happiness and longevity is friendship. If making more money requires you to spend less time with friends and making friends, it won't make you happier.

pwthornton 14y ago
As for me, what would make me happier financially? Not having a mortgage would be number one. Well, wouldn't making more money help that? Yes, but the temptation for a lot of people would be to just get a bigger, more expensive place. This is why you'll find households in the 90+ percentile will mortgage payments late into life. Instead of paying off their mortgage faster, they get bigger houses, do remodeling and spend more and more on their houses. My wife and I might get a slightly bigger place when we have kids, but we'd like to be mortgage free by the time kids go off to college.

josephjrobison 14y ago

Does $75k mean pre-tax or post-tax? Post-tax comes out to $46,800 a year in California, that's $3,900 a month. Which is great, but yea when you start thinking about a wedding in the future and kids college, you're left with $900 a month to save for those things, granted you don't blow it on vacations and other activites. A sample monthly expense (doesn't apply to everyone, can be reduced by a lot by eating beans out of a can and walking 12 miles to work) If you're paying $1,000 a month in rent $100 in utilities $400 in groceries $100 eating out $100 clothing/supplies $400 car payment $200 gas $400 student loans $200 in credit cards $100 in misc. That's $1,300 left over.

ShawnBird 14y ago
> $100 in utilities That seems really low. I live in a small house and here are my utilities: Phone: $50 Internet: $60 Water/sewer/garbage: $100 Electricity: $80 (less in the summer, more in the winter) Gas: $10 And you left out mandatory insurance which is ~$150 for car + home. Total: $450/month
- josephjrobison 14y ago
  Oh well I live with two roommates so $120 cable + $40 water + $60 electric = $220/3 = $73+. And yes auto insurance is something I forgot at another $100 :)

therandomguy 14y ago

Here is an almost bizarre theory. When your salary crosses the average number your enjoyment of things that you can buy with money goes down drastically. You have much more appreciation of the used car that you bought out of college as the monthly payments pinched you a little. A good way for you to maintain that effect is to keep stepping up your lifestyle as your salary increases. Constantly buying a little more than you can afford. You can easily afford a Honda now? Buy BMW. Goes against conventional wisdom, but food for thought.

daeken 14y ago
That's one of the things I do. Not generally with large purchases, but the $300 difference between a nice Dell panel and a Thunderbolt display is small and easily pays off in the "oh sweet, a beautiful new toy!" feeling that I get from it.
cgmorton 14y ago
My question is, what are you doing 'enjoy[ing] things that you can buy with money'? Hasn't it been well enough established that things don't make you happy? The Greeks figured that out two thousand years ago, guy! Let me tell you, I bought a used car just this year and I appreciate it way more because I didn't bankrupt myself to do so.
- therandomguy 14y ago
  "Have you seen anyone sad on a jet ski?"
patio11 14y ago
One could envision a business built on providing a convenient wrapper for this strategy, where you sell young professionals functionally equivalent copies of the goods they purchased as college students, but charge three times as much for them. This would let you signal to the young professionals that they have "made it. (They'd probably also tsk-tsk about college kids buying things which cost X. I mean, sure, college kids don't have 3X, but isn't 2X the absolute minimum to know that it is safe for human consumption? Oh, college kids...)

ygmelnikova 14y ago

A society that correlates material wealth with happiness is shallow and deprived. Or have you never read Dickens?

dinkumthinkum 14y ago

Let's be honest, no matter where you live $75K isn't much. Even if you live in cheaper areas, it may not be poverty but it's certainly not happiness inducing wealth. Let's be serious.

jonknee 14y ago
You could live like a king on $75k in many places in the US. Pretty much anywhere far enough outside of a big city and that's not close to the water.
Evbn 14y ago
In Iowa it is plenty.
rprospero 14y ago
I completely disagree. I'm making $27k and that's more than enough to keep me happy. Sure, there's some niceties that that I could pick up with a $48k salary that would ease some stress, but I'm certainly not living like a miser. I'm seeing Joshua Bell in concert next week, my fiancee and I have two cars, and the we go out to eat regularly. Honestly, if someone can't be happy with $75k, I can't imagine that $75M would fix it. To prevent anyone from asking, yes, I'm living in the US.
- dinkumthinkum 14y ago
  I don't want to upset anyone or anything but $27K is in the ball part of poverty. I'm glad you are happy that's fine -- everyone is familiar with the idea that money is not the only way to happiness. Simply because you are happy is not really much an indicator, let's be honest. I don't want to call you out, it's not my intention. Some people are perfectly happy to live an acetic lifestyle with no money in a mountain in Nepal. Perhaps you are similar in mindset, that's perfectly OK. But that's neither here nor there; it's anomaly. Because you both have cars doesn't speak to much; we don't know how they were paid, how old they are what happens if their's transmission, whatever. To compare $75K with $75M is almost hard to take seriously.
dasil003 14y ago

codegeek 14y ago

It is enough as long as you can manage the following math: Cashflow in (net) > Cashflow out (net) It is that simple. Yes of course at $75K in NYC, your "cashflow out" variable needs to be lower than what it would be at $120K. So it is your choice. Make $75K in NYC but want to live in manhattan ? Sure, you can do that but your non-housing costs have to be significantly lower. Master that formula for life and u r golden. I have been doing it for years. My income has seen significant changes over past few years (luckily positive) but when in confusion, I use this formula time and time. Also, I love to discuss this with my wife whenever she says "we make so much money. Why can't we buy X now"

hudibras 14y ago
Somebody's been reading David Copperfield. "Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."
- codegeek 14y ago
  funny but this is something that sounds so trivial once someone says it. Most people however overlook this simple formula because they use emotions rather than brain.

drharris 14y ago

This is not too far from my own salary in a rural-ish area, my wife making half that as a teacher. We budget and manage our money carefully, and are indeed happy; we never disagree about money. When I was in major debt, I found I was constantly stressed and on the edge. Once it got paid off, I felt free. I have a mortgage and student loans (and a year left on a car note), but it's just a monthly payment with low interest. Even with a second child on the way, I don't feel worried; it won't be easy, but it's definitely manageable. One of the biggest mistakes I make is seeing people save for their kids to go to college. Not only can you barely beat inflation (if not for the tax benefits), what happens when your child wants to major in Psychology? I treat college like an investment; for some careers it's appropriate, others not. If it's appropriate, then you should be able to take out loans that can be repaid in 5-6 years. If the career they want does not allow for that, then some better decisions need to be made. Nothing wrong with skilled trade these days. My only worry (and it doesn't keep me up at night) is with retirement. I save probably 10% toward that, with 11% returns the past few years (I know, right?), but even at that rate I won't really be able to retire until my late 60s if I want any sort of decent life. I'm working now on trying to save more so that maybe I can retire earlier. In the end, I believe unhappiness with money has more to do with debt than income. I'd imagine the results are skewed because people making $75k may also tend towards less debt. I imagine those making half that amount would be plenty happy if they had no debt to worry with.

Evbn 14y ago

Does this article talk about regional variance of cost of living? Saving for retirement? Raising kids? Or is it the quarterly blogspam repost of a poorly structured survey from many years ago?

dmazin 14y ago
The main discussion of the article consists indeed of the things you mentioned.
kylemaxwell 14y ago
You could always RTFA and find out, you know.

cantastoria 14y ago

Call me paranoid but I always feel like these studies are being done to lay the groundwork to justify tax increases on the affluent. "You don't need to make that much, we've done research! $75,000 is all you need trust us, you'll be just as happy." Just a thought...

joonix 14y ago
These studies just want to cram everyone in America into one cliche stereotypical lifestyle. Have you seen the the lifestyle of the Average Joe? Diet of terrible, unhealthy processed foods and fast food. Chain restaurants like Applebees for a special night out. Overworked, with minimal employee protections and benefits. Limited traveling/vacation time. Living in isolated, distant suburbs with soul crushing commutes in traffic. I'm not knocking these types of people, but I doubt many on HN would be content with that standard of living. For that lifestyle, $75k/yr is more than enough. But I would hate that lifestyle, so $75k simply isn't enough.

tbatterii 14y ago

and if you're married and have kids..... multiply by 3 at least.

samstave 14y ago

I am so tired of this argument, and the only people here in support of such a statement, I feel, are the young single and childless. Take a divorce, child support, travel etc into account and I cannot live on anything less than $150K Rent for a house with several children, for me, is $2300 for a two bedroom with a garage, yard and an extremely lucky addition of a very large play room. I am REALLY lucky to have this place - as it would go for $3500+ if I move out.... The argument for less and less salary always sounds to me like peasants justifying their fealty, though at the same time - we should not be decrying arbitrary pay brackets - but demanding more fair pricing for all the tings that are required to survive and thrive. Everything is overpriced.

sliverstorm 14y ago
I think it is mostly a reaction to the people who publicly declare they are barely scraping by at $500k, and the new taxes will break them.
cm2012 14y ago
My parents raised my sister and I for 20 years on a civil servants salary (30-90 thousand over the time period). One hour from Manhattan, only he worked, and neither of us had to take debt for school.
esrauch 14y ago
I honestly thought you might be kidding at first, but it looks like you are serious. The vast majority of people who have divorced and pay for 2 kids are making far far less than $150K and they aren't starving to death. Only about 5% of households in the US make more than $150K/year; if you feel like you are scraping by with that much income then you must be buying a lot of things that you don't actually need.
- samstave 14y ago
  I don't buy anything I don't need. I pay cash for everything and have no debt. But with a $2000 a month child support bill, full medical, $2300 rent, ~$500 in other bills, etc, I do not have much left at all after all my basic expenses. People think $150k is a lot on paper - but when you add everything up, it is not actually a lot.

Irregardless 14y ago

Well, at least he proved himself wrong by posting this link: "Yes, Money Does Buy Happines: 6 Lessons from the Newest Research on Income and Well-Being" http://m.theatlantic.com/business/archive/2013/01/yes-money-does-buy-happiness-6-lessons-from-the-newest-research-on-income-and-well-being/267016/ http://m.theatlantic.com/business/archive/2013/01/yes-money-...

jpdoctor 14y ago

> When did a millionaire become a working class stiff? 1990s, so not exactly news to anyone familiar with inflation. The expression is pre-1980s really. Put $1M in an inflation calculator for 1975, and you'll find that equates to about $7M now. It makes sense: You'd live very well off of interest from $7M.

hhuio 14y ago

I make more than double that and I still can't afford a house here :(

byjess 14y ago

You can also divide that by the number of mouths you have to feed.

maxharris 14y ago

"Enough" perhaps for an average person, with average ambition (far below what it ought to be) and ability, living in an average house, in an average town. Which describes no one and nowhere.

honu 14y ago

One premise the author stated is "cutting your spending rate is much more powerful than increasing your income". The idea seems to be that this both increases one's ability to save while also lowering the bar for current and future expenses. Many people could benefit from taking a hard look at their expenses and trying to find areas to cut. That being said, taking this orientation has its limits. First, there is a floor to how much savings one can make on a given lifestyle. Additionally, the upside potential is limited if a lot of time and effort is spent on trimming expenses. Some folks, especially the type of folks who frequent HN, have substantial opportunities to increase their income (e.g., through freelance work) that often suggest that increasing income is MUCH more powerful than cutting one's spending rate (I think patio11 has mentioned something like this). Often times the equivalent of one or two hours of tech consulting can cover the cost of many "unnecessary" conveniences that save one time and/or effort. Additionally, it's much more scalable -- that is, the upside of saving more of an increased income frequently has more upside potential than cutting costs. Of course, not everyone can do tech work, and even tech workers will probably need to adjust their spending to a lower level once they are on "fixed income", but I think these lines start to stray from the central issue. As for startups, I think a holistic approach to assets and resources needs to be considered. Specifically, often the scarcest asset is founder time, so spending money to save founder time is often an <i>extremely</i> prudent choice to make in terms of adding value to the company.

pfedor 14y ago

So never mind that there are other studies which point to different findings. More importantly: the study finds that money above $75k has no impact on "Emotional Well Being = the quality of a person’s everyday experience such as joy, fascination, anxiety, sadness, anger, and affection" however at all levels more money improves "Life Evaluation = a person’s thoughts about his or her life (on a longer time scale)." How have we decided to call the first one "happiness" and not the second one? Maybe that's how the psychologists define happiness, but it's not the everyday meaning of the word as I perceive it. Granted, English is not my first language but I would say "happiness" includes both "emotional well being" and "life evaluation", and maybe even with more emphasis on the latter when contrasted with, say, "joy" which is the one that pertains more to the short-term states, isn't that right? As a concrete not money-related example, parents of young children probably typically don't have very good "emotional well being" as defined above, but nevertheless by every account I've heard they're usually very happy, which means precisely their "life evaluation" is high.

jinushaun 14y ago

Reading the comments on here, it's incredible how many on HN don't realise how privileged they are. $75,000 is a lot of money, even in NYC and SFO, and the people who think otherwise are probably single 20-30 somethings that insist on living by themselves. Traditionally, children lived with their parents, even after marriage, until they can afford to live on their own. There are millions of people in America living in much less than $75k per year and doing just fine even in the big cities. (Otherwise, there wouldn't be a "bad part of town") My parents raised three kids on less and they now own a house and two cars. People in higher incomes forget that there is an entire other country of people who make much less money than they do. 72% of households in the US live on less than $75k. In Manhattan, median income is $65k! There is living breathing proof of people living below these numbers everyday. These aren't unicorns. It's not rich, but nor is it poverty, which is defined as $11,500 in NYC for an individual. Truth of the matter is, if I made $75k, I'd have a $75k lifestyle. If made $150k, I'd have a $150k lifestyle. Even if I made $1M per year, I'd have a million dollar lifestyle and probably still feel poor. I'd drive a more expensive car, buy more expensive groceries, live in more expensive housing, eat at more expensive restaurants, wear more expensive clothes, have more expensive hobbies and take more expensive vacations. What this article claims is that past the magical $75,000 mark, we are as poor as we allow ourselves to be. Saving money and not building debt is very hard to do for most people. It's a fact of life that people like to live beyond their means. I know I do.