The Surprising Truth About Income and Happiness

Can I ask you a question? How much money would you be content with making this year?

But seriously, stop reading for a second and get a number in your mind.

For all of you follow-the-directions types out there: yes, I mean after taxes. And yes, by “content” I mean as dictionary.com puts it, “a state of happiness and satisfaction.”

Do you have a number in mind?

Okay, let me ask a follow-up question: how do you plan on spending that money?

Hi! I’m Shanna Skidmore! Former Fortune 100 Financial Advisor turned business consultant. I help business owners just like you make money and then manage it well! We’re all friends here so let’s skip the formalities! Hi, I’m Shanna. I’ve been told I have a knack for making complicated financial strategies simple and empowering former money avoiders to actually get excited about looking at their numbers!

I’ve traveled across the country speaking to business owners about money, mindset and fulfillment and asked these very same questions. You might be surprised to hear the most common answers I get:

1. Q. How much money would you be content to make this year? A. $40,000
2. Q. How do you plan on spending that money? A. Blank Stares

CAN MONEY BUY HAPPINESS?

Today I want to dive into the topic of money and happiness.  Does more money actually bring more happiness?

How often do you feel that one more client, or (ahem) one more “ideal client”, would make you truly happy? Just one more purchase or one more launch, and you’d be set. How truly content would you be if only you could make it to six-figures?

We can spew the old, “Money can’t buy happiness,” adage until the cows come home, but somewhere deep down our actions just don’t match our words. We want more.

I absolutely love teaching about business tips and pricing advice to help you reach your business goals, but I believe through all this business talk there has been a piece missing. We are all working so hard to build great businesses, but for what exactly?

Well, to build a great life right?!

But as we jump on that all-too-familiar hamster wheel chasing after one more dream client or that big lofty sales goal, I think we sometimes are so focused on building a great business we forget the LIFE part.

At the end of the day, why are you doing what you do? And what do you plan to do with your money once you’ve worked so hard to make it?

LIFE OVER BUSINESS

In 2015, Angus Deaton won the Nobel prize in Economists. Snoooooooore. I get it, but don’t let me lose you here. The study he published suggests that income and happiness are only correlated up to $75,000.

Actually, the study wasn’t about happiness at all, but more about wellbeing. Mr. Deaton found that only until household income reaches $75,000 does money seem to buy more happiness. After that point, he found no direct correlation between increased income and increased well-being.

What does that tell us?

1. There is a baseline need. Under $75,000 there are going to be more basic needs unmet and less excess income leftover, resulting in more feelings of longing.
2. After those needs are met (arguably the $75,000 household income), it’s all about how we spend the money we make.

THE TRUTH ABOUT INCOME AND HAPPINESS

Do you want to know the truth about income and happiness? (aka “how to feel more satisfied with the income you’re making?”)

Know Your Need

According to GALLUP only 30% of US households have a budget. Now I know that “BUDGET” is like a six-letter curse word for a lot of us. That’s why just a few years ago, I decided to flip the script on budgets and start calling them “Spending Plans.”

This goes back to my second question: “What would you buy with that income?”

Often I hear entrepreneurs throw out goals like “make six-figures,” or “replace my corporate salary.” Both are great goals, but they’re meaningless unless tied to actual consumption. Think of it this way: What do you want to buy? And how much does that cost?

Go in with a Plan

As Dave Ramsey suggests, you need to honor every dollar. Back when I worked in the world of finance with my black power suits and three inch high heels, I used to say this sentence on the daily: “What they need more than anything is a budget.”

You see, it may have been the doctors and lawyers (and let’s face it, the other finance professionals) driving the fancy cars—but it was often the teachers who felt they had actual control over their money.

One reason I believe this is typically true comes back to expectations.  Teachers didn’t go into their profession believing that having more than enough was an option. They were prepared to manage their money well because excess (“extra”) wasn’t the expectation. On the flip side, the white collar types I worked with expected the excess—and as a result— they often spent what they expected to make, not what was actually coming in!

Here’s the secret : Wealth isn’t about how much money you make; it’s about how you spend the money you make.

Spend with Intention

I cannot tell you the amount of wine and tear-inducing financial chats I’ve had with clients come April 14th every year. Clients who look back at the year behind them and say, “Where did all that money go?”

It’s not fun to see how much money you actually made without also seeing how that hard earned money moved you closer to your goals. Tony Robbins says, “Happiness is progress.” I love that. It’s not about the destination; it’s about each step you take towards it that matters.

Pursue Enough

Erin Loechner wrote one of my favorite books of all time, Chasing Slow. In the book she talks about how the concept of more is unquantifiable. In other words, there will always be more. More is a moving target.

In business, I think we often focus on getting to the destination, on hitting the goal. Very few people talk about what happens when you actually hit the goal. When I hit my first goal, I was caught off guard by what happened next. I thought I’d be sipping pina coladas, kicked back somewhere carefree. But I wasn’t carefree at all. In fact, the opposite happened. I was afraid I’d never hit that number again. I feared the sales would stop. I worried I’d get left behind.

But over the past few years I discovered a new mantra for life. You see, I ran in the rat race for a good decade or so, but now I want to run in a new race. A race toward wellbeing, satisfaction and fulfillment.

When it comes to money and happiness, I believe there is only one true way to achieve those goals : pursuing enough.

HOW TO AFFORD THE THINGS YOU DREAM OF HAVING

So what’s the point? What’s the takeaway? Stop believing the lie that more = happiness. And instead, get smart. What do you truly need? And what steps are you going to take to get there?

I promise, the more intentionally you spend, the more happiness and satisfaction you’ll feel when it comes to achieving your personal financial goals.

I’ve been working on something just for you! Think: How to afford the things you actually dream of having (ahem, lake house! Yes Please!)

I know you’re working so hard to put money in your pocket, but I think it’s about time we start dreaming about what to do with that money we’ve worked so hard for!

If you want to dig deeper into this topic with me and learn exactly how I manage my at-home finances I invite you to join me for a FREE TRAINING : “How to afford the life you dream of living without giving up the lifestyle you love having!” In this one hour class I’ll dig deeper into spending plans, personal money management, and achieving your big money goals!

Want to dive deeper? REGISTER FOR THE FREE CLASS

Photography by Ally & Bobby at The School of Styling