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Do you believe that money can’t make you happy? Do you want to find out if you should take a lower paying job to be happy? In this article, you will learn if it pays to take a salary cut and take a lower paying job to be happy.
Let’s face it, we have all heard that money can’t buy happiness. We have also heard that money isn’t everything when it comes to a fulfilling career. But will taking a lower-paying job make you happier?
This article will explore the connection between your pay and your happiness by answering some common questions and looking at the most recent research.
In this article, you’ll discover:
Does a higher salary make you happier?
What income are people happiest at?
Should I take less money to be happy?
When should you accept a lower salary?
How do I survive a low-paying job?
Answering this question is not easy. At its core, the question is complex on many levels as there are so many different factors to consider, such as your culture, age, country, and economic condition, to name a few. But before we can even ask if a higher salary will make you happier, there are a few other questions that need to be addressed first.
This question has been asked for centuries. The quest to define happiness has even spawned its own branch of Psychology – Positive Psychology.
The Merriam-Webster dictionary defines happiness as a state of well-being and contentment. If ten people were polled and asked how they define happiness, you may get similar but different answers. No matter the dictionary definition: individuals will define happiness as they see it.
Which brings us to the most important piece of the puzzle, what makes you happy? Assuming happiness will elicit joy, what exactly makes you happy?
In the context of this article about whether a higher salary makes you happier, it was always thought that money cannot buy you happiness. Well, it seems that recent research shows that a bump in pay could in fact make you happy.
According to Matthew Killingsworth, a senior fellow at Penn’s Wharton School, one reason why individuals with higher income tend to experience greater happiness is because they have greater control over their lives. He says, “When you have more money, you have more choices about how to live your life. You can likely see this in the pandemic. People living paycheck to paycheck who lose their job might need to take the first available job to stay afloat, even if it’s one they dislike. People with a financial cushion can wait for one that’s a better fit. Across decisions big and small, having more money gives a person more choices and a greater sense of autonomy.”
So, if more money and more freedom, along with more control over your life makes you happy, then yes, a higher salary will make you happier.
But, as with all things in life, there is a flip side to every situation. Mr. Killingsworth goes on to say, “Although money might be good for happiness, I found that people who equated money and success were less happy than those who didn’t. I also found that people who earned more money worked longer hours and felt more pressed for time.”
It has long been thought that there is a positive correlation between money and happiness, but when a US wage earner hits $75K+ annually it is no longer a factor. However, this notion is no longer thought to be the case. New research shows that there is no point at which money stops being a factor in happiness.
But again, the correlation of money to happiness will depend on such individualized factors as age, culture, geographic location, and economic conditions.
Of course, other job-related factors go along with being happy, including job satisfaction, relationships, and personal well-being. But with this new research, it appears that there is no specific salary that people are happiest with. Higher pay seems to push the boundaries of happiness for workers.
If earning a top dollar is a priority to you, then negotiating a higher starting salary is important. Here are a few things to consider when negotiating a higher starting salary:
Make every attempt not to negotiate or even talk about salary in the interview. Your power to negotiate is strongest once you have been offered the job.
Know your worth and be able to articulate it to the employer.
Negotiating a higher starting salary in the beginning is key as it leads to larger bonuses and pay increases; these may be determined percentage-wise according to your salary.
We have already established that making more money correlates to more happiness. But we have also established that it is not as cut and dry as it may seem.
Forbes cites one study saying, “The research, which was reported on by the Harvard Business Review this week, surveyed a group of 100,000 working adults. Of them, it was consistent that those who were willing to give up earning more money in favor of regaining free time experienced ‘more fulfilling social relationships, more satisfying careers, and more joy,’ and overall reported higher rates of general satisfaction.”
On the other hand, part of being happy is related to job satisfaction. The Pew Research Center has examined the state of American jobs and their findings indicate that employed Americans with high family incomes say they are the most satisfied.
65% of those making $75,000 or more say they are very satisfied
49% of those making $30,000 to $74,999 say they are satisfied
51% of those making less than $30,000 say they are satisfied
As you can see, there is no one size fits all answer. It boils down to how you define happiness and identify what makes you happy. If taking less money will bring you a sense of joy, fulfillment, and purpose without sacrificing financial stability or placing undue hardship on your lifestyle, perhaps taking less money is an option and may lead to a road filled with happiness.
There are many reasons why a person may be willing to accept a lower salary. But one true constant is that only that individual can decide when it is okay to accept a lower salary.
Some reasons a person may accept a lower salary to enhance happiness include:
Wanting less responsibility and stress
Wanting more time away from work
Changing careers to do something more fulfilling
Moving to an area where the cost of living is cheaper and the quality life is better
But before you walk into your boss’s office, tender your letter of resignation, and ride off into the bliss of a lower paying job, there are some important things you should first consider that may not only take away from your happiness, but also add stress to your life:
Are you financially in the position to take a pay cut? Will you be able to meet all your financial obligations as well as save for retirement?
Have you thought long and hard about if this is the right move for you now and in the future?
How will taking a lower salary impact your current lifestyle, health insurance, and ability to manage unexpected emergencies?
Will taking a lower-paying job take away your job security with the threat of continually reduced work hours, layoffs, or downsizing?
If you decide to take a lower-paying job to be happier, there are certain steps you should put in place to overcome any unforeseen challenges:
Create a budget: Take note of all your monthly bills and cut back on unnecessary expenses.
Live within your means: It is important not to overspend or indulge in frivolous purchases.
Save: Get in the habit of allocating a specific number or percentage to savings.
Get a side hustle: Embrace the gig work culture and look to supplement your income with a part-time job or perform freelance work.
Stay positive: Always remember why you took a lower-paying job. The purpose was to boost your happiness. If you find that taking on a lower-paying job is more stressful than its worth, then you may need to rethink if this is the best move.
Surviving a lower-paying job can be challenging, but with strategic planning, it is possible and may do wonders for your happiness.
When answering the question, does a higher salary make you happier? You must consider factors such as your culture, age, country, and economic conditions.
The thought that money cannot buy you happiness may have been dispelled with recent research that shows a bump in pay will in fact make you happy.
It was once believed that when US workers reach an annual salary of $75K or more that happiness could not be increased. New research shows that there is no point at which money stops being a factor in happiness.
Making the decision to take a lower-paying job to be happier should not be taken lightly or without planning and strategizing how you will survive with less income.
Earnest is a Career Coach (CPCC) and Resume Writer with expertise in providing professionals with the tools to effectively navigate the job search and prepare for a successful career. He has extensive experience leading HR and recruiting efforts. Earnest specializes in training, coaching, and mentoring career seekers on how to gain and maintain a successful career filled with purpose and passion, and he believes true career success comes from being holistically balanced.