For those of you who have been reading my student loan updates, you may remember the entry linked above with its tired, exhausted tone throughout the update. My aggressive student loan repayment was – and continues to be – the right path to financial freedom. The truth, though, is that this repayment schedule is tiring and taxing on my wallet. But does it impact my overall happiness and well-being? I don’t think so, but let’s see what the folks at Princeton University have to say about it!
The folks at Princeton have an interesting study about money and perceived happiness.
An August 2010 study by Princeton University suggests that the more money you make, the happier you are… until you make $75,000 per year. According to the study, $75,000 is the magic number where a person’s annual salary maximizes personal happiness. Any money earned over $75,000 doesn’t significantly add to a person’s evaluation of their life. The study also suggests that when you make less money, then issues like poor health, divorce, and loneliness are amplified. In other words, if you can make $75,000 per year, then you just might be able to buy yourself into being satisfied with your life.
From my personal experience with sinking so much money into repaying my student loans, I don’t know if I’m a good example of the results from the Princeton study. Sure, my income is at or above the $75,000 mark (forgive me for trying to express some modesty with my income here, folks), but I wonder if the Princeton group analyzed what the impact is of significant levels of debt on the happiness or perceived happiness of individuals. On the one hand, I’m a happy guy with not many complaints so I think I already fit well into any happiness measures. On the other hand, though, even with my current income I’m constantly trying to find ways to earn more money so I can retire more debt.
In light of my own experiences, I would suggest that there might be an addendum that we can include with the Princeton study. That addendum would say that while making $75,000 per year is the apex of integrating money earned with impressions of happiness, there is a correlation between exhaustion and high levels of debt – regardless of how much money one makes.
All of this really begs the question, though, on what you think of the results of the Princeton study. Do you think $75,000 is enough of an annual salary to buy happiness? Or, as the Princeton folks write it, is $75,000 in annual income enough for you to feel satisfied with where your life is right now?
I don’t know – I wonder what other people think about this conclusion. It seems to me that $75,000 might be a lot of money in some parts of this country, but not necessarily so in other parts. Also, if you have extreme amounts of debt, then how much of that $75,000 is actually being used to enhance those factors in your life that would leave to an improved self-image? Or improved happiness? And is there a level of debt where the money you owe is small enough that it doesn’t necessarily impact your happiness any more? Interesting questions…
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