How much money is enough?

by Erika Torres

Almost two months of living at the new place, and almost every day at some point, I still turn to Eric and say “I love our new home.”

Even though we’re spending more on living expenses, our happiness has skyrocketed since moving out of the love shack. And let’s face it–that living style was not sustainable.

I haven’t felt “poor” since we moved. I can invite my friends over for dinner without feeling embarrassed. We spend so much time at home, watching DVD’s, cooking and drinking wine.

The weird thing too is that even though we pay a heck of a lot more in rent and utilities, we’re still managing fine financially. I haven’t felt the crunch of our new increased rent at all– even with Eric out of commission for a whole month.

Perhaps it’s because if we really had to, we could get by on my salary alone–and we use Eric’s salary for savings and paying off debt and all the fun stuff.

But it made me wonder–at what point, income-wise, will we feel financially secure?

How much money is enough?

There are a few steps to get to where I will feel fine–comfortable, even–with our finances.

  1. I would like to pay off my student loans. I am not going to say debt-free, because I do expect to accrue debt for a mortgage and perhaps a car within the next few years. I just don’t see any way in saving up for a car while paying off my student loans at the same time and building an emergency fund.
  2. I would like to have an emergency fund of at least six months of bare minimum expenses saved up.
  3. I would like to have enough money saved for a down payment on a home and not have to be renting the rest of our lives.
  4. I would like to be contributing the full match to our 401K (it’s done on my part, Eric doesn’t have one offered through work yet) and maxing out our Roths (we opened Roths this year, but we’ve only managed to put away $100 in each of them right now *sad face*)
  5. I would like to be able to go on a big vacation once a year.
  6. I would also like to be able to eat out at restaurants more without it killing me wondering how much this is going to cost us.

That’s what it would take for me to get to the point where I would be comfortable with our finances. I don’t need to buy more clothes or more stuff, but I do enjoy the experiences of vacations and restaurants. That’s what I would spurge on if we had more money.

I know that once Eric gets his firefighter job, a lot of these things will happen really fast. But I am an impatient person and I want it to happen all now, now, NOW!

However, I think the move has helped us out so much with just being happier with where we are in our lives. We’ve come so far in paying off big chunks of our debt, and with just the student loans left, it feels good to know we’re in the home stretch.

What would it take for you to be comfortable with your finances?

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Dionysius April 30, 2012 - 8:26 am

My humble 2 cents. Aim to get out of the rat race in a few years time. If not, you will be getting into a whole new world of debt. And the next thing you know, you are sinking deeper and deeper into the rabbit hole. Your desire to improve your lifestyle puts you onto the next level of expectations. To satisfy the desire, you aspire to climb the corporate ladder, advance in your career and strive for higher salary. Then you spend more on housing, a car and other comforts in life. Constantly telling yourself that you deserve them. Thereby fueling the need for more money. And the cycle goes on and on. Don’t get entrenched in this cyclic self-destruct route.

B. (Below Her Means) April 29, 2012 - 9:16 am

I like to think that $70K (which is $20K more than I currently make) would be a good, happy bracket.

Sean @ One Smart Dollar April 28, 2012 - 5:44 pm

I’m the type of person that no matter how much I have in the bank it will never be enough.

Must Read List – April 2012 April 26, 2012 - 8:18 am

[…] How Much Money is Enough? Erika at Newlyweds On A Budget tries to answer this tough tough question. How do your financial and lifestyle goals compare? […]

Anna @ Good Cents Savings April 26, 2012 - 7:46 am

I think when you get to that next level of income, lifestyle, etc. it’s so hard to keep from wanting just a little bit more. And really, is that such a bad thing? It’s part of what inspires you to keep working hard, and striving to meet that next goal. I think you have a great balance of loving what you have and where you are now, with an eye on what you want in the future and the motivation to get there!

Jai Catalano April 26, 2012 - 7:43 am

My father used to say the more money you have the more you spend. I think I have learned through mistakes (I am admitting he is right) that I don’t need to spend a lot to be happy. If I had 100 I wouldn’t spend it unless I needed to or it meant me being truly happy. Truly happy is subjective but I truly mean truly happy.

Glad you love your new house. When are you inviting team 3 over for a housewarming? 🙂

SWR April 26, 2012 - 6:58 am

My partner and I have zero interest in home ownership in the next 10 years, and really ever. That’s good, since I’ll have a house’s worth of school loans by the time I’m finished.

I think comfortable (for us) will be a full year’s worth of living expenses stashed away in the event that we both lose our jobs simultaneously. In terms of our day-to-day, not much will change if/until kids come along except more travel.

Nichole @ Life as a Newlywed April 25, 2012 - 2:06 pm

Funny you posted this so recently. I’m on a job hunt since getting laid off and everything I am finding is a pay cut! I was just saying to a friend how I’m bummed that I won’t make as much as before; but then I realized that even though I will (most likely) take a pay cut, its still more than we technically “need” to live on. But like you, I’d like to save and be prepared in case. So I guess I don’t know what we really “need”

LifeInTransition April 25, 2012 - 12:38 pm

I’m not sure how much money would be enough. I think the answer would change at different life stages. I feel pretty comfortable where I’m at right now since I don’t have any debt, not to say that I’m never worried about money. Compared to our peers, my fiance and I are pretty well off financial health wise. He was able to pay his first 3 semesters of dental school with cash, while everyone else has been taking out 20k loans for each semester. The idea of taking out loans for the next 5 scares me since it’s a lot of money.

This Aggie Saves April 25, 2012 - 8:02 am

If I could save up for a 20% down payment on a home, be able to afford that mortgage, and still be able to fully fund a Roth IRA and continue to live my life the way I do now, I’d be set .

Paul @ The Frugal Toad April 25, 2012 - 6:19 am

I think that changes over time. I would include things such as having the funds to pay for my kids college education so they would not have to take out a loan, and leaving an estate that would one day provide for my grandchildren.

Daisy @ Add Vodka April 24, 2012 - 6:34 pm

I think to be comfortable with my finances, I’d have to be able to pay all of my bills, own my own home and a decent method of transportation, and be able to save for retirement and have fun. So I’d say around $80K a year. Vancouver is expensive. If I lived somewhere cheaper it would be a lot less I think.

Teacher Girl April 24, 2012 - 6:08 pm

If I could pay all my bills on time in the same month, save toward an emergency fund, pay off my student loans, and travel, I would be the happiest person on Earth.

CeCe @Frugalista Married April 24, 2012 - 4:56 pm

It will be enough when I can quit working. It’s not my “real” answer because that will never happen but it’s the one I wish were realistic anyways.

shopping2saving April 24, 2012 - 1:47 pm

I’m EXACTLY like you. I’m impatient and I want things NOW! Are you a Scorpio too? Lol

I hear it a lot from my BF. I want everything right now and everything you listed to feel comfortable is exactly what’s on my list. My BF will bring it up all the time when I talk about saving but then going on a vacation but also paying off loans and mortgage. And sometimes I do want clothes and shoes. I can’t wait until the day when I am comfortable. It doesn’t have to mean debt-free but living a life where I can comfortably work towards paying off debt and saving.

Serendipity April 24, 2012 - 1:41 pm

I don’t know if I will ever really have “enough’ money. There is so much I want to do and I feel like the possibilites are endless!

One Frugal Girl April 24, 2012 - 1:14 pm

I am already comfortable with our finances, but I will be happier with them when our mortgages are paid off!

ImpulseSave April 24, 2012 - 12:40 pm

Those are some very worthy goals, indeed 🙂 For me to be financially comfortable, I think I would want:
1) To be 100% debt free (this means paying off all my student loans, as that is my only debt).
2) To at least be well on my way to having a solid housing fund (whether that is a deposit on a house, or a comfortable renting situation).
3) To be able to afford all my bills while still managing to get out and have fun every once in a while!

Michelle April 24, 2012 - 12:26 pm

Glad you’re happy! I think I would be more happy with my finances once my student loans are gone. Those give me a huge headache.

jobo April 24, 2012 - 12:01 pm

I love this! I am so glad you are in a comfortable spot. I am starting to feel that way too, finally saving regularly and feeling like I’m not so much paycheck to paycheck. It is so satisfying right?

20's Finances April 24, 2012 - 11:36 am

I think your list is about the same as mine. What seems most important is that I would love to buy a home in a couple years (and have a washer/dryer and dishwasher in my home).

Jordann @ My Alternate Life April 24, 2012 - 11:15 am

Comfortable with my finances…well I know I won’t be comfortable until the following stuff happens:
1) My student loan debt and car are paid off. (About 30k)
2) Six months living expenses socked away in an emergency fund.
3) My fiancée’s income to level out (he’s starting a business so pay cheques are so irregular)
4) A 20% down payment on a little house.
5) Enough money left over for us to pursue our hobbies (our hobbies aren’t extravagant) and take the occasional vacation.
6) Retirement funds planned and funded.

I’d imagine in about five years I’ll be “comfortable” with my finances. Until then I’ll keep plugging away. 🙂

Brent Pittman April 24, 2012 - 11:08 am

I’ve read that the peak happiness income is 75K and after that there are diminishing returns. Here is the link to the Princeton study:


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