Money vs. Happiness: How Purpose, Salaries, Jobs, and Careers All Fit Together
Choosing a Career for Happiness or Salary, and How to Have Both
You’ve arrived at a fork in the road.
To the left, there is a quaint home, with a loving family, and a happy job. You might not be well off, but you get by. You seem happy despite some of the stresses of not having a lot of money from your career. Your job is what you’d always hoped it would be; teaching at the local community college, or working in a local non-profit.
To the right, there is a nice high-rise apartment and a fancy well-dressed spouse. You’re both living in luxury, and your job is stressful, but can afford you this wonderful view of downtown. You work most of the week, and even on some weekends, but you never want for anything. You might even drive one of those new fancy Teslas.
In life, it’s hard to discuss what’s best for any individual, and happiness is an opinion that changes with every person. Everyone has different desires in life, but many are faced with that one difficult decision: should I work to get a better paycheck, or should I work in the field that I love and possibly never break the ‘middle-class’ label?
Although it is impossible to decide for you, here is some information on what the experts suggest when you come to this difficult crossroads.
Does More Money Mean More Happiness?
Having money may not make you happy, but having no money will make you miserable.
The Most Satisfying Salary
According to a study with the National Academy of Sciences, there is evidence to suggest that getting paid more money, after a certain point, will not bring more happiness. Researchers found that the cut off for a larger salary equalling greater happiness was somewhere around $75,000 a year, or a traditional middle class income. Any money made over that threshold did not equate to an overall increase in job satisfaction and showed no correlation with happiness at all.
This is the concept of diminishing returns: increases to the amount of effort put into something no longer provide equal benefits compared to before. In other words, for workers that are making over $75k per year, getting a bonus is no longer as rewarding as it was before they reached that threshold. Making more money can still be somewhat satisfying, but it is less so because many of your needs (paying bills, buying a home, saving, etc) are met at $75k a year. While you are working your way up to that $75k salary, each raise and increase in your pay can have a large impact on your overall happiness as well as your job satisfaction. After you’ve crossed that threshold — according to the research — you’ll find more happiness by looking outside of your career and compensation.
Unfortunately, if you make less than a traditional middle class income, then “money” will make you miserable due to the overwhelming stress of not having enough to live and pay the bills. Daniel Kahneman, a psychology professor at Princeton who co-authored the study on salaries and happiness, stated: “It’s not so much that money buys you happiness but that lack of money buys you misery. The lack of money no longer hurts you after $75,000”.
Pursuing Money or Job Satisfaction
However, this salary isn’t just the magic number for everyone. Further context is needed to understand how salary can impact different people with different needs. For one, families might need to make a higher salary so they can start saving up for their children’s higher education and additional expenses. Another scenario is that those with medical debt might need to make more to compensate for the increase in bills. Although people often spend more as they make more — and thus experience diminishing returns in using money to buy happiness — having a lot of bills to pay doesn’t always result from having expensive hobbies or splurging on fine dining. Earning a higher salary may be necessary to covering the basics and finding security.
Ultimately, that is the general limit on the ability of money to mean more happiness: earning enough to cover basic expenses. Making more than that baseline can be nice, but it isn’t the key to lasting, profound happiness all on its own — and how you spend your extra money matters as well.
Happiness Through the Generations
Money is utilized differently across generations. Although everyone values and needs security, many Baby Boomers and Generation Xers prioritize consumer spending more than their younger counterparts. That means they often have more debt, and subsequently might struggle to maintain their standard of living once they retire on a fixed income. Salaries that approach this golden number still aren’t any guarantee, because stress — and the relationship your career has with your life — play a huge role in happiness.
It is also important to note that, although $75,000 a year is a comforting salary goal to set, many people can live happily below that number with the help of loans or credit cards. Many people have found that — although they may not have the money upfront for items they need — they can utilize debt to their advantage. As long as you stay smart about your spending, as well as smart about paying off your debts on time, that magic number doesn’t have to be a definition for success. Being debt-wise can lead to success, as well.
Career vs Job: What’s the Difference, and How It Affects Happiness
Outside of making the magic number in terms of your salary, it also helps if you enjoy what you’re doing. For some people, their “job” is simply a means to a paycheck. The pay is necessary, but the work doesn’t bring them any satisfaction or enjoyment. In general, that’s a rough definition of job: these kinds of positions probably pay less, are less enjoyable, and tempt you to put in the minimum effort possible. You are looking to pay bills with a job, not find joy and purpose. In that sense, a job may not be the key to happiness, so much as a necessity to avoid crippling debt and the associated stress and unhappiness of unemployment.
However, on the reverse of this coin is the “career” option. These positions don’t always have continuity and homogeneity, but they do provide progressive opportunity, better networking, often better pay, and ultimately more purpose and satisfaction. Even if you’re making less than the magic salary number, having a career means working towards something that makes you proud, and that will bring happiness.
Job Satisfaction and Happiness
Although we use the term “job satisfaction” to describe happiness at work in general, it seems you are more likely to find yourself satisfied with your work if you have a career, rather than just a job. A career comes with goals, an interest in advancement, and doing more than earning a paycheck. Job satisfaction can be one of the ways you continue to find happiness in life without depending on money or salary alone. Of course, achieving greater job satisfaction may mean leaving behind a soulless job and setting out to build a career.
As hard as it may be to give up a decent paycheck, working a “job” that doesn’t bring you the satisfaction of a “career” is not worth your effort. Even a job that pays well may take such a toll on your body, your mind, and your overall happiness that even the money is no longer worth it to you. It’s easy to say you should work doing what you love, but in practice it’s harder to achieve. However, once you get to that point of loving your career, you’ll notice a major difference in how you feel. The paychecks will be more rewarding, but so will your day-to-day life.
What Is More Important: Job Satisfaction or Salary?
It is important to note that, again, different generations have a slightly different tolerance when it comes to working for a purpose, and distinguishing a career from a job. Many Baby Boomers and Generation Xers might be comfortable simply working at their job due to the security it provides them for their post-retirement lives. Or maybe their career is an essential part of their identity, and they wouldn’t give it up even if they were millionaires. It is impossible to say whether job satisfaction or salary is more important, because one person’s definition of success may be tethered to income, while another person is looking for a purposeful career regardless of how well it pays.
On the other hand, millennials highly value having a purpose and receiving recognition at their job or career, and many millennials may find themselves hopping from job to job before they fully settle on a career. Additionally, every generation and individual has a different approach to finding a work-life balance, and not everyone wants to work doing what they love. For some, doing what they love might be a hobby they save for the weekends only. Job satisfaction can just as easily hinge on work-life balance as on a salary, a flashy title, or a deep sense of purpose in the working one is doing. Any of these is a valid goal, and can unlock happiness for an individual with clear priorities.
True Happiness Comes with Goals, Time, and Dedication
Finding happiness in money isn’t as simple as a magic number, or choosing the right path on a forked road in life: it’s considerably more complicated. Yet, so are humans. We are all complex and unique creatures, struggling to find what drives us, and hoping to stay happy (and stress-free) despite the daily grind. All those unique situations that created you should help you formulate the path you need to follow. Plus, studies do show that following your passion will help you reap greater rewards through that job over a period of time.
In fact, the likelihood of success increases in line with the satisfaction one feels at their job. Daniel H. Pink, author of Drive: The Surprising Truth of What Motivates Us, has dived into the science behind success. According to Pink: “Generally, people flourish when they’re doing something they like and what they’re good at.” Thus, the happier you are, the better off you will be at that job, and potentially the more successful you could become.
Keeping that in mind, choosing the happier job could be the key to a successful life. Both in the sense of income, lack of stress, and overall satisfaction.
What Is Happiness, Anyway?
In conclusion, the question of big money versus job satisfaction is complicated, but easy to answer once you have all your cards laid out on the table. Happiness is an opinion, but facts do show that high wealth is no guarantee to happiness. However, choosing the more satisfying job could be the most beneficial choice in life if you’re willing to put in the time.
It’s almost like the tortoise and the hare. The hare runs fast to try to get to the goal quicker, but the tortoise, through patience and perseverance, is able to reach the goal first. Be the tortoise.
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Katie McBeth is a researcher and writer out of Boise, ID, with experience in marketing for small businesses and management. Her favorite subject of study is millennials, and she has been featured on Fortune Magazine and the Quiet Revolution. She researches SEO strategies during the day, and freelances at night. You can follow her writing adventures on Instagram or Twitter: @ktmcbeth
This post was updated December 11, 2017. It was originally published January 25, 2017.