On Oprah’s show a few weeks ago she had a guest on who claimed that a combined family income for a family of four to live comfortably happy on is $75,000!  I’ll repeat. $75,000!  So you’re telling me that if I had a family of four (which I do) and I had a combined family net income of no less than $75,000 (which I do) that we’d be financially happy (which we are not) - give me a break!  Maybe making a combined take-home household income of $75,000 worked in the 70’s, but today, that wouldn’t even cover a family of four’s basic needs!

For a lot of people, the word money is a dirty word and an even dirtier word when you combine it with the word happiness.  I am one of those people that are not shy to say it – I Love Money!  I don’t make excuses for it, at the end of the day, it is something that I value.  Don’t get me wrong, I don’t think that everything in life has to come with a price tag to be seen as important, but given the choice, I’d rather have the problem of having too much money than not having enough of it (and let’s be honest, who would argue with that).  But the real question is, when is enough, enough?

So, this magic number of $75,000 got me thinking, I was intrigued, and thus began the quest of interrogating my friends and family, getting their perspective on this topic.  I can honestly say, that out of everyone I spoke to, the only person who agreed that $75,000 was a good number was a friend of mine, who was single, had very little debt, and no kids!  Even when I spoke to couples and mentioned the $75,000 number, a common theme I heard was “As a couple, we take home more than $75,000/year, and we financially struggle AND we don’t even have kids!”  Something just wasn’t adding up!

So instead of just voicing opinions and comments, I decided to test out this theory and do the math.  On the revenue side of things, if a family of four’s combined household net income was $75,000, then that means that the take home amount would be $6250/month.  Now, onto the expenses.  Below I’ve listed some of the basic living expenses for Canadians, for a family of four (this data is based on 2005 numbers with 3% annual inflation rate taken into consideration):

So before we even start talking about home repairs, putting our kids in extracurricular activities, vacations, life insurance premiums, presents for birthdays and holidays, paying off student loans and other debt, savings for our kid’s education, RRSP’s (which by the way, in my research, I learned that we should be investing at least 10% of our take home income into RRSP’s – who would have thought), etc., the average family of four is just scrapping by with no savings for the future.  Some of the expenses I listed may be higher or lower than what you are currently paying, but when you consider everything that is not listed there, you are probably starting to join my “$75,000 doesn’t cut it” crusade.

So whether the magic number is $85,000, $100,000, or $150,000, one truth remains the same – money can’t buy happiness, but it sure can make things in life a heck of a lot easier.  I agree, an over abundance of money does little to improve one’s happiness in the long run, but I seriously question that only $75,000 is the amount we'd need before our own internal happiness index plateaus.  The $75,000 magic number to me truly is magic, because with a family a four, your money has a funny way of always just disappearing into thin air – but that’s just my 4 cents!

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Comments (1)

• 2011-02-25 11:02:54 | |24.224.226.xxx| Eric Wood  - Good one!

  Nice post. I'm a stickler on spelling but love the unintended double entendre of "just scrapping by" : - )

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