Chasing more is exhausting and will make you miserable. When a target is in constant motion, it becomes impossible to ever reach it.
At what point does more stop adding value to your life? How do you decide when you have enough money and things?
What Is Enough?
It’s greater than meeting your basic financial needs. It accounts for your wants [link] and even some luxuries, too!
YourDictionary.com defines enough as, as much or as many are necessary. Enough occurs at the point when you consume not too little, not too much, but just the right amount. It’s your Goldilocks Point!
You have enough when you are happy and thriving with what you have. It allows you to live in full expression of your values and morals.
The Law of Diminishing Marginal Utility
This Economic Law states that as consumption rises, the amount of marginal utility (happiness) you receive from each additional unit decreases.
For example, imagine you’re starving. You have never been so hungry in all your life. Your stomach is growling! Finally, you get a sandwich and devour it in seconds. It’s delicious and so satisfying! Then another arrives, this one’s pretty good. Not as satisfying as the first, but still good. You eat a third, and this one is okay. By the time you finish, you’re full, can hardly move, and the thought of food makes you uncomfortable. This is the Law of Diminishing Marginal Utility at work.
This Law holds true in our consumption habits. The first time you purchase a good it always provides the largest benefit. Consequentially, each one thereafter provides less and less happiness. This is part of the reason why consuming more does not satisfy.
What Is Enough Money?
Answering this question is a first world problem. It’s one that everyone needs to stop and consider.
Is $1 million enough money for you? How about $2? $5? $10? $100 million?
How do you know what is or isn’t enough?
At some point, money will have no further significance in your life. Your drive for it slows and stops because it’s no longer required to meet your needs and wants. It fails to increase your sense of life satisfaction. You realize pursuing it alone is a waste of your most precious resource, time.
How To Determine What Is Enough Money
Unfortunately, most people have settled with society’s definition of enough, which is MORE than they have right now.
Start by describing your own version of enough. Ask yourself the following questions:
- What makes you happy?
- What can’t you live without?
- What can you live without?
- What do you need to thrive?
- What do you waste?
- If you stopped wanting more, could you work less?
Once you define enough, begin backing into the numbers behind your ideal lifestyle. How much would you spend each month on your largest expenses? Your needs and wants?
Imagine traveling the world, how much would it cost? Consider all the expenses involved. Things like flights, hotels, food, and the fun experiences you want to have. Then reverse engineer the amount you will need to make it happen!
When you determine what is enough money, you increase your awareness. You become conscious of your spending habits and all the stuff in your life. This knowledge helps you to decrease consumption and live more in line with your values!
Ask yourself the following:
- How much income supports your lifestyle?
- How will your expenses change over time?
- What spending feels wasteful to you?
- What items do you throw away often?
- Would it make more sense to rent, instead of buy an item?
More Helpful Tips
- Review your finances on Personal Capital
- How is your income, savings, and spending trending over time?
- Don’t compare yourself to others (I know, easier said than done)
- Measure your progress to the one person that matters, you!
Why You Need To Determine What Is Enough Money
When most people think about this question, they’re often referring to retirement. The dollar amount that they need to get out of the 8-5 (or is it 6?) rat race.
You need to answer this question so you can base your financial freedom plan around it. Enough is based on your ideal lifestyle and is tied to a specific and measurable dollar amount. This allows you to set SMART financial goals and work towards them!
Also, taking the time to decide what is enough money helps you determine what is adequate in your life. You will choose to make purchases based on your budget and wants and needs.
When you determine what is enough society will stop interfering with how you use your money. You will stop over consuming and spending. Instead, you will save more money and achieve your most important life goals faster!
For 12 years I worked towards financial freedom. I reached my freedom number and began questioning everything I had been working towards. I knew some people that reached financial independence with more. Was my amount enough? Should I keep working to be sure?
I thought back to my definition of enough and the life I wanted to live. Immediately, I knew I had enough and it was time to quit my job and start living the lifestyle I wanted. Afterall, greater life satisfaction doesn’t come from owning a particular product or achieving a certain net worth, it comes from living a life that is true to yourself and without regret.
The key to having enough money is knowing when to stop. Enough doesn’t stem from more. It comes from being grateful for what we already have.
