http://www.everydaymoney.ca

« Buy your Facebook friends -- consider it a business decision | Main | Is your resume out of date? »

September 08, 2021

Do you care what other people make?

People often confuse who they are with how much money they make. And then they make the mistake of looking over the fence.

This desire to "keep up with the ­Joneses" gets lots of us in trouble, largely because so many of our neighbours are up to their eyeballs in debt and almost broke.

Ironically, a study by Glenn Firebaugh of Pennsylvania State University suggests that even affluent people are often most unhappy when living around those who are better off. 
Mining 30 years of survey data on well-being, he sorted working people by income and then by how happy they claimed to be, while controlling factors such as race and gender.

Firebaugh argues that, in evaluating their own incomes, most people compare themselves to their peers of the same age. In other words, it's not how much you make or have, but how you measure up that drives people’s emotions.

Even a society-wide rise in the absolute level of wealth wouldn't boost happiness as much as relative financial gains, he maintains.

Well, according to Statistics Canada’s most recent income data, the median total income for single Canadians is just a bit less than $36,000.

So maybe you’re not as badly off as you might think.

This is the number for individuals, of course. Couple families (married or common-law, including same-sex partners) living at the same address, with or without children, come in at about $86,000. Two-parent families with children, which excluded retired families, can lay claim to a $100,000 median income.   

Tell us. Do relative income levels affect your thinking?

By Gordon Powers, MSN Money

TrackBack

Comments

Post a comment

advertisement

Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

James HaversJames Havers

James is the senior editor of MSN Money living in Toronto. He has worked for the Nikkei Shimbun (Tokyo), canoe.ca, AOL.ca, Canadian Business and other publications. Havers turned to journalism after teaching overseas.

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...