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August 11, 2023 at 01:14 PM
Most U.S. residents say that in order to be happy, they need an annual salary of around $100,000, but relatively few reach that benchmark, according to a recent survey from Moneyzine.com.
The median income in the U.S. is around $31,000, the report said, which means that most people earn about a third of what they think they should be paid.
The study found that the average American requires 150% of their current income in order to be content. But that figure varies significantly across the country, with residents in the most expensive states needing a significantly higher percentage, and in the least expensive states, a lower one.
As advisors know, the amount of money needed to be happy varies widely among clients based on their needs, financial goals and lifestyle expectations.
“In general though, most clients definitely want to have enough for unforeseen emergencies and, outside a mortgage, having little to no debt is when you see the happiness around money begin to improve,” Daniel P. Lash, Partner and Advisor with VLP Financial Advisors in Vienna, Virginia, told ThinkAdvisor in a written message.
But whether your client is wealthy or just trying to get by, it’s all about cash flow.
“It doesn’t matter whether your lifestyle means that you need $2,000 a month or $20,000 a month as long as you can relax in the knowledge that the costs are covered,” Lora J. Hoff, a certified financial planner based in Dallas who works with medical professionals, wrote. “Making more or spending less is the same when it comes to what is left over at the end of the month. The trick is really to be happy with what is reasonable for you.”
Both advisors said moving to a state where costs are lower could be a sound financial decision.
Moneyzine surveyed 1,200 Americans with an average age of 40 about how much income they would need to be satisfied. Researchers used publicly available wage data from the Bureau of Labor Statistics to make comparisons between desired income and actual income across 15 different industries.
See the gallery for the 12 states where it takes the least income for residents to be happy, according to Moneyzine.
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