[Video] How Much Does Your Income Affect Your Overall Wellbeing?

If you opted-in to the Free Video Series, you remember that I mentioned there are 5 Areas of Life you must master. One of them is your Financial Wellbeing.

So the first thing I have to make very clear that Financial Wellbeing isn’t about how to design your budget properly, be a good investor, or how to make a lot of money…. because if you look around, there are plenty of people who do all of those things very well and they are NOT necessarily any happier for it. 

Most of what we have been taught to believe about money and its influence on our quality of life are all wrong.

We have a tendency to use our salary or income as one of our primary metrics of success. But the idea that more money equals more happiness is a MYTH unless we know more about how to actually use your money to drive your happiness.

So the big question is, how much does income actually affect our overall quality of life? Is there a certain amount we MUST make in order to be happy?

Well, the answer is yes and no. Income is important up to a certain extent… but the key is to focus less on how much you earn, and more on what you do with it.

Let me explain…

In the US, on average, people experience more positive daily emotions as their income increases from 0 to $75K… but after $75K in annual income, daily happiness levels out. In other words, once you have enough money to cover a little more than life’s basic necessities, money is no longer the key driver of happiness….

Unless.. you change how you spend it.

If you strive to keep increasing your income so that you can buy more stuff, bigger stuff, nicer stuff… your happiness won’t increase.

HOWEVER… if you use that money to spend on experiences then it will!

Here’s why spending money on experiences is KEY to thriving in your financial wellbeing.

An experience consists of 3 parts - the time leading up to the experience, the experience itself, and time afterward (or the memory of the experience.)

For example, say you’re planning a vacation that you booked 6 months from now. For the next 6 months, you’re going to derive pleasure and happiness during the planning phase. You’ll google the various details online, find photos, you’ll discuss ideas with whomever you’re taking the trip with, and you’ll live many days with excitement in anticipation of what’s to come. Then there’s the experience itself - that time on the beach, sipping cocktails and relaxing in the sun. And even after the experience is over, you get to reap the benefit of sharing the memory over and over. And it’s up to you how much you want to keep the memory alive, and how much happiness you want to take from it.

So think about the ways you’ve been spending your money. How much of it is being spent on material possessions vs. meaningful experiences?

And remember, spending money on experiences doesn’t mean you need to be planning an extravagant vacation. It can simply mean the difference between treating a friend to an ice-cream, instead of buying another iPhone app. It’s that simple!

So get out there and start experiencing more of life and you’ll be on your way to Financial Wellbeing.

If you've put this "hack" into place in your own life in some way, share your insights in the comments below!