Does your salary make you happy? The psychology of income vs. happiness
We’re constantly being told that money will buy us autonomy, security, and happiness. That we just need to earn one more promotion before we reach true life satisfaction. That more money will equal more fulfillment. But is this really the case?
I know for myself that I was the least happy making the most money – and I see this same realization playing out over and over with my candidates.
In my case, I was making great money but I couldn’t escape the feeling that I was just a number to my superiors. It was a large company and I had no power to influence decisions or shape the future of my role. I only lasted 1.5 years before giving notice and joining a team that appreciated what I had to offer – even at a lower salary.
I learned my lesson the hard way. Now I want to help you avoid my same mistakes.
Don’t believe me; ask the experts.
According to people far smarter than I, life satisfaction and income grow together until you hit about $75,000/year, at which point the happiness curve flattens out. A more recent 2018 study bumps that number up to $95,000/year, but its conclusions remain the same: after a certain point, money stops making you happier.
Now consider this – 90% of people say they’d take a 23% pay cut on all future earnings if it means getting a job that offers them real meaning. This makes perfect sense – most of us desire a purpose beyond profit. Yet we somehow forget this fact when it comes to the negotiation table, opting instead to chase the almighty dollar…no matter how high our salaries soar or how low our life satisfaction plummets.
Here’s why: humans only think we have “enough” if it’s more than our friends, peers, or greater social network. We can’t help but compare ourselves to others. It’s not intentional or malicious – it’s just a fact of human evolution; survival of the fittest. And so we work tirelessly toward financial goals, even after we’ve made more than enough to secure happiness and freedom. That’s why so many unhappy millionaires still work day and night at their thankless jobs; because someone they know out there has more than them.
Life beyond $$$
Of course, that’s not to say that money shouldn’t factor into your calculations. Depending on your goals and lifestyle, money might reasonably be the #1 determining factor in your job search. The problem is when money blinds you to the (sometimes extensive) shortcomings of a role, tying you to a workplace that doesn’t bring you satisfaction.
I’m talking about things like:
- Remote/hybrid offices
- Opportunities for growth
- Larger or smaller team/company
- Startup dynamic vs. stable company
- Softwares and systems being used
- Liking your manager, team, and projects
- Feeling valued as a person and a professional
Like it or not, these ‘secondary considerations’ can make or break your day-to-day life satisfaction. A bad boss is the #1 reason people leave their jobs. A long commute can significantly decrease emotional and physical well-being. A startup dynamic may energize some people, while leaving others feeling drained.
It all comes down to tradeoffs and priorities. The more invested you are in one factor (say, salary for example), the less negotiating room you’ll have for the others. So think carefully before you put all your eggs in one – very expensive! – basket. And try out this Opportunity Chart to clarify your priorities and objectively rank what actually makes you happiest versus what looks good on paper.
When’s the best time to find your next role?
Now that you’ve carefully considered what will – and will not – give you purpose and satisfaction, it’s time to actually pursue your job search in earnest.
There are two major factors to consider when getting started –
It’s never been easier to find a new role at a company you’ll love, likely with a significant pay boost. Hiring Managers are fighting over top talent, adding perks and sign-on bonuses in an effort to entice people to accept their offers. And on top of that, we’re approaching the end of the year – which means it’s the ideal time to start looking before the rush of January applications come in.
How is your current role measuring up against your vision? Are you getting what you want out of your job? Are you building toward the career you envision? Have you put in 2+ years, and still haven’t gotten a promotion? What does your manager say when you speak to them about your next steps?
These are the kinds of questions that will help guide your decision making (and I’m happy to provide more guidance, too – reach out.). Just remember, humans crave purpose and fulfillment. If you are seeking new employment simply for the pay raise, you might be selling yourself short.
Finding that careful balance between income and…everything else is a tricky process, made even more difficult by the complexities of human nature. We can’t help but compare ourselves to others, even when we know that money alone can’t compensate for an excess of shortcomings. That’s why information is our best weapon against irrational decision making, allowing us to think clearer and make better choices for our future selves.
I’m happy to talk you through your specific career options – tell me about your situation at email@example.com and we’ll get things rolling.