We've written about the ideal income for happiness before. Some figures have it at $50,000 a year; others at $75,000. Depending on your own needs for life satisfaction, this number may be significantly more or less. One financial pro shows us how to calculate our own "magic number" for happiness.
In a post for Mint.com, Certified Financial Planner Brittney Castro explains that she helps clients figure out their "magic number." This number consists of how much money they need, annually, to live a happy life, while simultaneously saving for a future life of enjoyment:
"Simply stated, a client's magic number is the amount of net income needed every year to cover his or her current lifestyle costs, save for the future, and spend money on things he or she enjoys in life."
Essentially, you first add up your basic living expenses for the year. This includes your housing, debt payments and bills.
Then, take a moment to think about the things that make you happy in life. Decide how you'd like to spend your money to cultivate these areas. For example, if you like to travel, you might budget for an annual vacation. Add up all of these areas, per annual spending.
After that, add up your financial goals. How much would you like to save for retirement each year?
Finally, add up each of these three areas, and that's your "magic number."
It helps to know this number when you're planning your financial goals. Castro uses examples to explain the concept in more detail—check out her full post.
How Much Money Will Make You Happy?| Mint Life
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Photo by Joe Shlabotnik.
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