The link between level of income & wellbeing

Does money buy happiness?

This is one of  the eternal questions about the relationship between wealth and happiness. Many people equate having more money with feeling better, since more money is seen as facilitating more luxuries, more time for recreation and not having to worry about day to day subsistence. More money should mean a better quality of life by standard metrics, but this does not play out in real life.

Perceived well-being

You would think that women with greater incomes would have higher levels of 'perceived well-being' than women with lower incomes.  This is not however the case, because other things affect women's sense of wellbeing. Especially health of loved ones, meaningful relationships, contentment, job satisfaction, safety and future security. In fact, for women in particular, income is much lower on their list of priorities than we may think.  

A US research report published in 2006, analysed the relationship between incomes and the sense of wellbeing. The report found that people on low incomes of $15,000 or less showed a much higher link between their income and perceived well being than those on $30,000+. Living on or below the poverty line obviously had a much greater impact on their sense of wellbeing.

Women's natural buffer

From the groups targeted, men on low incomes where found to be significantly less satisfied than women. Women's sense of wellbeing is tied more closely to their personal relationships and community membership than income.

This natural trait of women can act as a buffer between their sense of wellbeing and their income. Whereas the identity of many men is more closely linked to their employment. Also it was found that people aged between 36-55 were less satisfied than the young or elderly.

With respect to the age differences, these could reflect the additional financial pressures associated with paying off homes and having dependent children (including teenage and adult children) during the middle stages of life. Separation and divorce are another source of financial hardship, especially experienced during these years.

It would appear that the accepted view among psychologists and increasingly economists is that household income is statistically significant, but has only small effects on measures of subjective wellbeing.  Income is clearly an imperfect measure of general wellbeing.

How can we live a life where we have a high level of well-being ? 

Check out our free section 'How to live like a millionaire'.  This will present you with a different perspective in regards to your relationship with money. The article explores the question of when is too much never enough and raises the question are we suffering today from 'affluenza'?

Too often women are so busy looking after everyone else they neglect their own self care

This selfless giving can be detrimental not only to the woman herself but also to everyone around her. A good analogy would be - during an airline safety talk, the cabin crew explain the importance of putting the oxygen mask on yourself first before putting it on the children.

In reality many women would not abide by this instruction as they would feel it was their responsibility to put it on the child first. Their caring and nurturing instincts overriding common sense. The truth is the child will suffer as a result of this if the mother falls unconscious. This same scenario plays out in many different but less vital situations.

Women who prioritise their financial health, benefit by an increased net worth. This in turn leads to increased self esteem. This increase in self esteem leads to a further increase in their sense of well being. The increase in their sense of well being further increases their net worth.

This 'worth circle', creates a self fulfilling prophecy.

It is never too late to get into this 'worth circle' . You can enter the 'circle' at any point and add to all three areas: self-worth, self-care and net worth. It is not as hard as you may think to get your financial wealth and wellbeing in shape.

Start by establishing your current level of financial health, take a couple of minutes out of your day to take our quick quiz. The results will point you in the direction you need to go towards your own financial wellbeing.