As you wade through your 2015 tax paperwork this spring, you can pat yourself on the back if you made about $75,000 last year. It’s the magic number, according to Princeton professor of economics and international affairs Angus Deaton, who earned the Nobel Prize for Economics in 2015. “More money does not necessarily buy more happiness,” he quips, “but less money is associated with emotional pain.”
In his influential 2010 scholarly article, “High Income Improves Evaluation of Life but Not Emotional Well-Being,” co-authored with Daniel Kahneman, he explains: “Perhaps $75,000 is a threshold beyond which further increases in income no longer improve individuals’ ability to do what matters most to their emotional well-being, such as spending time with people they like, avoiding pain and disease, and enjoying leisure.” Most Canadians are nowhere near that mark: median individual incomes are just $32,020.
But happiness — or Deaton’s definition of it — is only one consideration when trying to answer: how much is enough? The American Catholic writer Heather King examines that question in her new book Loaded: Money and the Spirituality of Enough. She, too, assesses the question of enough based on happiness. However, she offers a more nuanced discussion of what that means. She introduces the book with the highly inspirational story of two members of the Catholic Worker Movement, a couple whose life of service to California’s farm labourers and their radical trust in God has always provided — precariously and humbly — enough for them and their children. They seem genuinely happy, dedicated to community and family. But then it gets really interesting.
King uses their story to call out Christians who lionize poverty for the sake of poverty. It’s a kind of sickness, she claims, that can lead to chronic underearning and debt. Ultimately, it undermines living in trust and abundance. “Poverty can become an idol just as much as wealth.” To illustrate that, she uses her own story, which includes a short stint as a lawyer, followed by years of gruelling near-poverty as a freelance writer. “I’m willing to live close to the bone to do what I love, I kept telling myself. I don’t work for The Man.” She never sold out, until she realized that indeed she had. She sold out, she writes, to fear and poverty. To the idea that money is “antithetical to spirituality.” She goes on to describe the costs of underearning: failed careers and relationships. “Underearning is perverse and it’s progressive and it kills: dreams, spirits, lives.”
In the church circles I know, this stuff will cut deep. Precarious contracts, inner city outreach, pensionless camp jobs and part-time ministry positions are superb at delivering the glamorous idea that money is antithetical to spirituality. King’s solution is simply to earn enough. How much is enough? The Gospel calls Christians to trust God, enjoy their abundance and share it generously. If you’re not able to do that, King says, you need to get clear about how much money you need. Make a realistic budget, and then earn that amount.
Underearning, of course, isn’t limited to church circles. Canadians are mired in debt. In 2015, for example, we owed $3,725 on credit cards, on average. This is entertaining stuff, as evidenced by the popularity of Canadian personal finance guru Gail Vaz-Oxlade’s TV empire, which includes Til Debt Do Us Part and Princess (a show dedicated to young women’s overspending). In Princess, Vaz-Oxlade promises to transform the subject from “spender to saver” in just four weeks, with an up-to $5,000 prize to help pay down debts. In one episode, a 30-year-old travel agent named Lasia overspends on clothes, travel and expensive nightclubs. “People like to party with me,” she says. Her brother clarifies, “When Lasia has money to spend, she’s got 25 best friends.”
The first step, in Vaz-Oxlade’s formula, is to get clear on the numbers — the same advice King offers. Lasia owes $31,000, and needs to double her income to $70,000, to afford her current life. Or, dramatically reduce her expenses. Lasia rises to Vaz-Oxlade’s challenges, overhauling her budget, career and lifestyle. She wins the $5,000. How much is enough, according to the show? Enough to cover basics, save, pay off debts and still enjoy life. And that will be a different amount for every person.
The show offers a heady dose of self-righteousness to the watcher. Princess features extreme examples and self-inflicted situations. But the show is popular, presumably, because debt is a constant companion in Canada. We’re all in this together. Average household debt hit $92,699 in 2015. Some blame silly spending, such as Lasia’s shopping obsession. Given the frighteningly evolving costs of 21st-century urban Canada, however, I’m not satisfied that it’s so simple. I once calculated that to buy a modest house in my hometown of Vancouver, pay for childcare, reasonable transportation, insurance, dental care, food, taxes, utilities, decent clothes and shoes, a two-week vacation per year and put 10 percent of earnings into savings, we’d need a family income of nearly $200,000 a year. That’s nearly three times the median household income in Vancouver (Vaz-Oxlade would high-five me: I left town).
For many young people especially, those old post-war touchstones — owned houses, family vacations — have become 21st century luxuries. Economically, Canada is changing quickly. A Vancouver tear-down that sold for $650,000 in 2005 is lighting up social media with its new outrageous listing price of $2.4 million. Oil workers are fleeing Alberta. The affordability of the clothes ‘n’ clubs lifestyle for worker bees like Lasia ended within two decades of Saturday Night Fever.
With Canada’s swiftly shifting economic reality, what money should afford — happiness, abundance, sharing — requires swift mindset shifting too. Get clear on your numbers and don’t overspend. Do you really need a house? A car? Meat every day? Piano lessons for your kids? Cauliflower? Given the enormity of Canada’s personal debt crisis, it’s safe to say that we don’t seem to be adjusting swiftly enough. How to do it with grace and sharing and a sense of abundance? That’s the challenge.
Pieta Woolley is a writer in Powell River, B.C.