Share this

If we look to the Oxford English Dictionary, money is defined as ‘a current medium of exchange in the form of coins and banknotes,’ and collectively are represented by ‘assets, property and resources’ that are ‘owned by someone or something,’ (2015). It sounds straight forward. Yet money and the process of obtaining money is one of the most complex elements of our life and subsequently our wellbeing. 

We all know financial health is important, but do we really understand when enough is enough or how different levels of wealth influence our mental, physical or relationship health? Today we’re going to explore the results from Yoke Consultancy’s research in the UK Financial Services industry and wider papers from the US to offer a practical way of understanding your personal relationship with money.

Money makes us happy

With the wave of self help and personal development upon us, we’re beginning to challenge old beliefs and expectations of what financial health looks like. This stems from a combination of things, but most interesting the ‘post financial crash’ culture that fundamentally shifted the predictable formula for getting rich. No longer can we expect jobs for life, or final salary pensions. This unpredictability of careers and money has meant we’ve begun to look elsewhere for wider ways to reward ourselves and find meaning. 

In Yoke’s research ‘Financial Health’ was ranked as 5th highest (out of 7) by all employees surveyed (+ 1000 respondents). This below median position may surprise some, but reflects the fact that aspects such as ‘Mental & Emotional’ and ‘Relationships’ now dominate our value sets. But why has this shift occurred and what impact has it had on us as individuals? 

According to a Princeton University study, that examined the income levels and happiness of over 450,000 employees, ‘we need £48,000 a year (each) to be happy.’ If we interpret this crudely if we earn less or even more than the threshold we are on average less happy that those within the ‘ideal’ income level. 

So does that mean income has a direct impact on our happiness? 

Well in essence no. The research found that regardless of income 85% of the Americans surveyed were happy anyway. However it is important, as we’ve spoken about in our other blogs, to consider the two aspects of happiness: that of ‘hedonic’ happiness, or the daily pleasures of life; and that of ‘eudaemonic’ happiness or the deeper underlying purpose and satisfaction of your journey. 

On the ‘hedonic’ front we can see how a medium level income can provide a path to finding balanced happiness. We may have relatively less stress at work, enough financial freedom to feel secure and explore our hobbies and on a day to day basis, time to have more fun! 

In contrast however on the ‘eudaemonic’ front we may feel that the magic £48k leaves question marks over our potential life satisfaction today. We could feel uncertain if we are as success and thriving as much as we could be. The Princeton study understood this subtle difference and subsequently asked respondents (through a Gallup survey) to rank themselves on a ladder of satisfaction. They had to place themselves on a rung from 1 to 10, with 10 representing highly satisfied and 1 highly unsatisfied. The results demonstrated that those with a higher income chose a higher rung and were therefore more satisfied. This trend was then analysed across the population and on average a 10% increase in income always improved satisfaction, regardless of the starting point. 

Figuring out what financial health means to you

It’s important at this point to understand where you fit in the £48k dilemma and as a result how it effects your wellbeing.

Step 1

Write down your current income level and then mark the following two questions out of 10, with 10
being very positive:
– How happy am I in my life today?
– How satisfied am I with my overall life today?

E.g. £60,000, Happiness/Hedonic = 7.5 and Satisfaction/Eudaemonic = 5.5.

Step 2

Using the wellbeing framework as a guide, identify your top 3 priority areas of focus for the next year; identify a goal within each and then mark if more money (e.g. than £60k) is an ‘enabler.’ E.g.

1. Physical Health – run twice a week regularly by the end of the year – £ not an enabler
2. Relationships – invest time in relationships through holidays & adventures – £ not an enabler
3. Meaning & Purpose – build my business with high quality marketing/PR teams – £ an enabler

Step 3

Map your 3 goals to the Happiness/Hedonic and/or Satisfaction/Eudaemonic buckets and predict by how much they will increase (or decrease) your existing scores and how much more money is required. E.g.

1. Physical Health – Happiness/Hedonic = + 2, Satisfaction/Eudaemonic = 0, £0
2. Relationships – Happiness/Hedonic = +2, Satisfaction/Eudaemonic = 1, £0
3. Meaning & Purpose – Happiness/Hedonic = 0, Satisfaction/Eudaemonic = 2, c. £5 – £10k

Step 4

Summarise your findings by totalling your scores up, assuming you achieve your goals, to see the potential impact on your overall wellbeing. E.g.

If I increased my income by £5,000 -10,000 (i.e. 10 – 15%) my Happiness/Hedonic score would be maximised at 10, and my Satisfaction/Eudaemonic score would raise by 3 points to 8.5.

When enough is enough for you?

Although simplified this exercise demonstrates the relationship between your wellbeing priorities and the income you need to enable these goals. Although awareness is maintained that there may be negative impacts on other aspects of the wellbeing, for your immediate preferences you can see how your daily happiness and overall wellbeing will change this year. 

As ever, these things are dynamic so it’s important to keep the practice up every 3 to 6 months, but this is a great way to understand when ‘enough’ financial health is ‘enough’ for you.


Rachel Arkle is Director of Yoke Consultancy, a leading wellbeing analytics company based in London and Bristol. As an expert in the wellbeing field, Rachel works with UK companies to help them understand and improve organisational wellbeing, in order to drive workforce and cultural effectiveness.

Rachel has worked with a range of companies from global consultancies to social enterprises in the UK and the US, and with over ten years' management experience, she ensures that her insight always adds value to a business's bottom line. She is completing a pioneering Wellbeing Masters Programme at Bath University, to deepen her expertise in organisational wellbeing.

Contact email:

View All Posts