Why the target moves
Two documented habits of mind keep people chasing. The first is adaptation: a nicer apartment delivers a lift that fades within months, after which it is simply the apartment. The second is comparison: satisfaction tracks how you are doing against the people around you, and a raise usually comes with new people to be around. Research on income and well-being finds that happiness does keep rising with income, but on a flattening curve. Going from $50,000 to $100,000 buys about as much as going from $100,000 to $200,000, so each additional dollar does less.
Price your good life
- Describe an ordinary good week in detail: where you wake up, the work, the people, what you eat, and what you do on Saturday.
- Put a yearly cost on each element, using your real spending records as the base.
- Add the irregular costs, such as travel, gifts, home repairs and a car every ten years, and then add fifteen percent for error.
- Convert that spending into the gross income needed to support it, including taxes and retirement saving.
The result is your enough number for income. Most people find it lower than the figure they had been vaguely aiming at.
Find what you would not miss
Go through twelve months of statements and mark every expense you cannot remember enjoying. Then mark the ones you would pay double for. The first group is where lifestyle creep lives, in upgrades that arrived with a raise and stayed from inertia. The second group is what your money is actually for, and it deserves more and not less.
Put a rule on raises
A simple rule prevents the drift: whenever your pay rises, half of the increase goes to savings or debt and half to living better. You still feel every raise. Set limits in advance for the large items too, such as a ceiling on the house payment that holds even when the bank approves more.
Spend the surplus on time
Once income passes your number, the surplus can buy things or it can buy freedom: fewer hours, a less lucrative job you prefer, a longer leave, the ability to turn down a promotion that would cost your evenings. A useful calculation is your real hourly wage, which is take-home pay divided by all the hours work consumes, commute and recovery included. Pricing a purchase in those hours changes many decisions.
Note Enough is not a vow of modesty. The number can be large, so long as you chose it and would recognize it when you arrived.
