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Your Salary Doesn’t Matter


Have you ever uttered the phrase, “If I made just a little bit more money….” or “I would be happy if I just had an extra $10k a year”? I think at some point in each of our lives, we all have. “You know, if we made an extra $10k, money just wouldn’t be nearly as tight and we could enjoy life!” Sure, maybe you’d be able to afford a jet-ski or you’d have a little more comfort when you write the check for that electric bill, but is this really 100% true? Does the amount of money we earn really have an effect on our happiness and our overall situation?

I’m thoroughly convinced that an increase in your salary will not improve your situation, and I have plenty of examples to prove it.

Your Salary Doesn’t Matter

I’ve seen this scenario play out time and time again, and I bet you have too! Somewhere out there, there’s a husband and wife that are living paycheck to paycheck, and they’re just waiting for the day when one of them gets a raise so they can start putting money in the savings and maybe even start a retirement account!

Well, that day that seemed it would never arrive was suddenly here! The wife just got an offer to move up in her company, and it comes with a 30% raise! They were both so excited! They could finally live like normal people! No more Ramon Noodles for dinner! In fact, to celebrate, they went out to the fanciest restaurant in town and dropped $150 on a single meal. During their dinner, they realized that her car really didn’t represent her title very well, now that she’s a big deal at her company. So, the next day they traded in their perfectly good used car and purchased a brand new mid-sized sedan that came with monthly payments!

Do you realized what just happened? Suddenly, this couple has no raise at all! Instead of being able to save and invest in their future, they’re now making payments on a depreciating asset. This happens every single day in America. We truly do mean to save and invest, but it just seems like the money is never there! The paycheck to paycheck lifestyle just continues to play out, regardless of the size of the paycheck.

More Debt Please

Our society is so accustomed to purchasing everything on credit, that when we get our hands on some extra cash it’s only natural to sign up for some more payments! This could be new furniture, a washer and dryer, a family boat, or even a small cottage on the lake! So, instead of actually getting ahead in life, we are putting ourselves farther in the hole, with very little hope of ever escaping!

Learn to Save

I have a few friends that fail to manage their money effectively. It’s true that they don’t make a large yearly salary, but it should be more than sufficient for them to coast through life without too many bumps in the road. Instead, it always seems like they’re in a financial crisis.

These same friends choose to buy their groceries at the local supermarket because they enjoy the atmosphere. It might not sound like much, but they’re paying $2.79 for bread and $3.29 for milk when they could limit their spending to just $1.69 and $2.39 at Aldi. Sure, the store isn’t quite as fancy and they don’t offer every kind of spice imaginable like some supermarkets, but it’s CHEAP! On average, if they just changed where they shopped for their food, they could save 40% on their grocery bill! If they regularly spend $300 a month at the supermarket, they could be saving$1,440 a year by switching!! Crazy huh?

Invest Early

If you do in fact learn how to cut down your monthly expenses, that means that you suddenly have an extra wad of cash to invest each month (do NOT go out and buy a new car!). Get into the habit of investing! So many people put this off for far too long, even those that have a hefty salary. If, however, you do start to invest your money, you will be miles ahead in the future compared to those high-income earning friends of yours. Like I said, your salary does not matter.

Learn to Be Content

Our society today teaches us that we need a bunch of stuff and a ton of wild experiences to be happy. This is absolutely untrue! Do you remember how it felt when you bought that car “that you’ve always wanted”? It was exciting wasn’t it!? But, how long was it before that excitement wore off? For most, I’d say that after a month, that car was just a car again. Happiness is not derived by the number of toys we have or by the size of our house. Happiness comes from a confidence in who you are and why you were put on this earth.

Most people increase their lifestyle with an increase in pay, but is that really necessary? No! In fact, it’s short-term thinking that often leads to empty pockets during retirement. If you are content in the present, it becomes incredibly easy to look to the future and make decisions today about what may happen 20 years from now! If you don’t have this vision because you’re never content with your current life, your salary certainly doesn’t matter.

You’re Blessed, and Don’t You Forget It

If you have a roof over your head, shoes on your feet, and food in your stomach, consider yourself lucky. With just these staple items, you are more wealthy than 75% of the world. Step back for a minute and take a look at all that you have around you. Sure, you may not have that boat that your neighbor brags about or the new Cadillac that shimmers in the sunlight across the street, but who the heck cares?? It does not matter!

Most of us own a car. Does it matter whether it’s a Toyota or a Ferrari? Absolutely not. They both get us from point A to point B. The same is true for your house. Does it matter whether you have an 800 square foot bungalo vs. a 5,000 square foot executive house? Sure doesn’t. You’ll have exactly the same comfort when you sleep at night as that big time executive that lives on the ritzy side of town.

Live with the future in mind and you’ll soon find that your salary does not matter.

What do you think? Does Your Salary Matter?



My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. I’m sure I could make do with my salary if it was regular. It’s just hard to budget when you don’t know if your next paycheck is going to be $100 or $600.

    • Hi Edward. Yeah, it’s definitely not easy with a varying income. I think the best way is to figure out your average over the past year, and plan to spend only 75% of that maximum. On the good months, keep your spending low, and then on the bad months, you’ll have some reserve. The emergency fund is definitely key though. Build it up as big as you can because you know you’re going to have some tough months in the future! It’s just inevitable.

  2. As far as happiness and quality of life goes I must agree that a larger salary mostly does not bring these and can be found on most any salary. I hear people all the time say me and the hubby can not have any quality of life on our $14,000 to $16,000 a year salary and this actually offends me! We have the same warmth, bed, tv, clothing and such as anyone else. We even have some extra comforts like video games and computers. We are happy because we choose to be and see what blessings we have in daily life, for we are very blessed in many ways money could never buy.

    • Great comment! It truly doesn’t matter how much money you make. If you can afford the staple items, then you could be just as happy if not happier than someone that “has it all”, but really has nothing.

  3. I am hoping salary does not matter! I am a few months away from pursuing my passion full time and will therefore go from $250k a year to $120k a year. I have paid off my debt (almost) and downsized as much as I can to accommodate this change. I will let you know how it goes!

    • Sounds like you’re well on your way to an awesome life Tony! Congrats on seeing the big picture. Keep me posted on how everything progresses!

  4. I went into teaching 12 years ago, taking a huge cut i pay. It helps that I keep a really low profile lifestyle and have practically no debt. On top of a big cut, I proceeded to max out my 403B etc. Money never made me happy and it still doesn’t. Lack of it can make me very unhappy though. I can adjust to almost any salary level.

    • I think you and I are pretty similar krantcents. I like to earn a buck, just like anyone, but I don’t feel the need to race out and buy a boat or a new car. I’m pretty content with what I’ve got. 🙂

  5. Sadly, I agree with you. For most people, it doesn’t mater how much they make or how much their raise is. They will find a way to spend it instead of saving it. It’s a shame because even a little amount adds up over time. I have a friend that works weekends at Lowes. Over the course of a few years, she accumulated over $15,000 in her 401(k)! She has more in her 401(k) from a job she only works two days a week than many have that work a full time job.

    • Cool story Jon! Thanks for sharing! A retirement account can really grow into something, even if you just work a few days a week at Lowes!

  6. Excellent post! I love how you pointed out the perils of lifestyle inflation and how important it is to remain content. Money truly isn’t the only answer for how to get out of a rough patch!

    • You’ve got that right! Thanks for the comment HHO! 🙂

  7. I can honestly say I resembled that remark, about 20 years ago.
    I always felt that if I made another $5k-$10k/yr I’d be able to do sooo much better.
    We’re up to saving almost 16% of my pay (and close to 20% if you count employer match). Every year that my paycheck goes up (and sometimes more frequently), I’m trying to adjust my 401k up until I max out. That’ll be another 4%-5% until I hit that max, but I can’t tell you how good it feels knowing that much is being put away for our future.
    Interesting about Aldi for you. We get a loaf of bread there for $0.99, but the milk for us is $3.49/gal. Caveat that with the more local store and bread is $1.69 and milk is $4.69.

    • Ha, yep! Different prices, same great deal! 🙂 It must feel good to invest as well! Congrats on your turn-around. I bet you’re 10x happier too! 🙂

  8. I really think it depends on where one lives. In SF, after $200,000, I think it doesn’t really matter. But perhaps in the midwest, after $75,000 is good enough!

    After a while, income is just a game anyway.

    • Good point FS. It does matter where you live, but it’s best to live frugally no matter what the numbers are. I totally understand what you’re saying about the game too. I earn quite a lot of side income, but I don’t do it to buy a new Mercedes. Most of the money just stays in the bank, because I don’t make money to show it off. I just do it to see if I can. It’s cool to hear that you’re similar.

  9. We definitely tend to spend more if we make more, and therefore making more money doesn’t make much of a difference. It is important to be content and if there is an increase, we should continue to live frugally.

    • You’ve got it! Glad you see the bigger picture too.

  10. Agreed! I think people feel they “deserve” a better lifestyle after a raise – after all, they’ve earned it!
    We shop at the local discount grocery store, but I have friends who won’t step foot inside… because it’s too “low class” for them. After switching to the discount grocery store our bills (for two of us) dropped $20 – $30 each week, and we’ve never looked back!

    • Sounds like you’re doing it right. Just because you make a little more money doesn’t mean you have to act all high and mighty. I still shop at cheap grocery stores too! The food is good and so is the price! 🙂

  11. Really smart advice. The marketing world targets this lifestyle inflation as well. Just think of all the ads will see for what to do with your tax return in the near future!

  12. None of that stuff matters technically because there’s always someone worse off or better off than we are.

    I personally think making a lot of money AND saving it, is the only path to wealth. Create a huge positive gap in between spending and saving, and you’ll never have to worry about anything.

  13. I definitely see your point and a raise for some individuals would most likely be squandered on new cars and clothes but if you gave me a 50% I can tell you with absolute certainty that it would matter =)
    I do agree that individuals should focus on saving and living within your means, the basic equation is spend less than you make and invest the rest!

    • Ha, good to hear Marvin! I don’t think my life would change all that much either. I know my house would get paid off faster though! 😉

  14. We started downsizing in 2005, and in 2006 we made our first big move: switching from a 1,200-square-foot apartment into an 800-square-foot one-bedroom in downtown Davis. We also sold one of our cars. With one car and a lower rent, our debt slowly started going down.

    • Great work Brady! Sometimes it’s incredibly hard to downside, especially when your peers start to question your actions. Sounds like you stuck to your guns and are now paying down your debt. You definitely won’t regret it!

  15. I get what you are trying to point out. If we spend more than what we have or what we ought to have, then no matter how big or small the amount of our money, it still doesn’t make a difference. It is by spending wisely that we can truly see the difference.

  16. As soon as I saw this post title the phrase that came to my mind was “Happiness is a state and not a goal”.

    As important as money is so many of us are letting it run our lives rather than the other way round. We all friends and acquaintances who seem to be setting themselves up for some kind of financial accident.

    Spending cash so frivolously may be a pleasurable pursuit but a lot of people confuse this with being happy. It is delusional.

    I’ve just been reminded of another phrase:

    “Money is a wonderful servant but a terrible master.”

  17. Great perspective here, Derek. Your POV reminds me of a good friend of mine. She works her tail off at her commission based job, and as far as I can tell, must have a pretty hearty paycheck every month. But she and her husband live in a modest home in a small town, and she has driven the same used car for 10 years. They don’t often eat out, and she maintains the same small yet professional wardrobe with few additions from year to year.
    They are saving for retirement, but also have chosen their one splurge to be travel. Once a year they go to their favorite destination, rent a house, and take along a friend of two to spend the week with them. This means they get quality time with people they care about, instead of throwing away money on car payments and a high-dollar mortgage.
    Prioritizing what’s important to you and figuring out just what you can afford is what makes life enjoyable.

    • Sounds like they have their priorities straight. Hang onto those friends! 🙂

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