New YouGov research shows that once you start earning more money and begin climbing the financial ladder, the more you need to be content. The financial terminology for this is the decreasing marginal utility of income; the amount of money needed to satisfy you increases with every pay rise. However, not only do you need more money to feel satisfied, you also feel the need for more money to get by.
Earn More, Need More
For example, people earning £28,000 a year claim that the amount they need get by on is £26,000, and the research shows that the amount of money people feel they need to get by coincides roughly with their current income. This continues to be true until people achieve higher incomes, and as people begin to earn more we begin to see a change.
According to the research conducted by YouGov, those with higher incomes not only need more money to feel rich, they also need more money to get by comfortably. Comfort seems to become more expensive the more we earn. Is this because as we earn more our spending increases? The amount of money needed to feel rich, and to live comfortably, often shoots above current earnings.
Detailed analysis of the research can be found on the YouGov website.
