What’s Your Magic Number?

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Amongst my current Personal Finance (PF) obsession, I stumbled upon this blog post – Work, Live What’s Most Important?.  I’m struggling with this whole thing pretty significantly at the moment.  I started to write a comment on the post, but it sort of took on a life its own, and thus it became this post instead.

The Financial Blogger, author of the post, included two graphs that show the “Average Number of Working Hours per Year” and the “Hours for Personal Care and Leisure per Day” for various countries [Source].   Compared to the average Canadian, I undoubtedly work more (300 to 400 hours more a year) and have less leisure/personal time (2 to 3 hours a day less).  And it’s awful.

Many PF blogs talk about finding your “magical income number”.   A few years back when I was reading The Happiness Project, the relationship between money and happiness was pretty prevalent as well.  This study by Princeton economist Angus Deaton and psychologist Daniel Kahneman has come up many times.  It states:

The magic income: $75,000 a year. As people earn more money, their day-to-day happiness rises. Until you hit $75,000. After that, it is just more stuff, with no gain in happiness.

(Note: The conclusion came from a series of Gallup surveys of 450,000 Americans in 2008 and 2009.)

I’m single, no kids, live in an affordable city, renting, and have no consumer debt – just a car payment and mortgage-sized student loan.  But trying to determine my “magical income number” feels rather impossible, and is extremely depressing.

I would be thrilled to be making $75K a year!  Especially if that was with only one job!  (Even though after taxes I would net more like $55K.) But my salary will NEVER reach that point.  Ever.  I’m pretty sure that my bosses don’t even make anywhere near that.  It’s extremely disheartening.  Even if I were to move to a bigger city, or bigger organization, I wouldn’t be making much – if any – more.  If I ever hope to make $75K a year, or even $55K a year, I’m going to need a new career.  Great…

I don’t regret my undergrad years at all.  Nor do I regret my year of post-grad.  But in retrospect, it took a lot of time, and an unreasonable amount of money to end up in a career that can’t even pay for itself.

Why am I sacrificing so much of my life (my health, my happiness, my relationships, my interests) to work all the time, to make insignificant payments towards a debt that will take decades to pay off?

About the Author

Amanda Kay, an Employment Service Specialist and founder of My Life, I Guess, strives to keep the "person" in personal finance by writing about money, mistakes, and more. She focuses on what it’s like being in debt, living paycheck to paycheck, and surviving unemployment while also offering advice and support for others in similar situations - including a FREE library of career & job search resources.


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2 thoughts on “What’s Your Magic Number?”

  1. Hey, it’s Debbie (your old roomie)… I understand completely what you are going through, and you’re not alone. I know it’s hard, but be proud that you HAVE a career…and that you are working towards paying your loan off. Maybe you will never make 75,000 but you are doing something and you can work towards a better position. Perhaps you should give up your second job if it’s causing you a lot of stress and taking away personal time. I promise if you give up fast food or only allow yourself one day a week you will save a lot… I know it feels like you’re in a tough place, but it undoubtedly could be worse: you could be like me, back at your old highschool job (arbys) working for minimum wage with six years of post secondary education behind you and on repayment assistance.

  2. You have all my feels miss. I’m a graphic designer and I don’t feel like I could ever make $75K in my career alone either. But I believe thru patience and smart financial management it’s possible to achieve that kind of income with the help of other means. The important thing is to stay positive and take the right steps to better ourselves. I think you’ll definitely hit the $75K mark eventually (^_^)/ But you must believe in this yourself.

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