So often, we view money as a tool to help us reach our objectives and fulfill our dreams.
But have you ever thought about how much money could actually make a difference in your life?
This is an intriguing subject.
It asks us to imagine a time in the future when money is not a limitation and to think beyond ordinary expenses.
While the answer to this question might seem obvious, there is no simple way to respond to it since our emotional reactions towards income, debt, and loss are so complex and varied.
In this post, we’ll explore this question, delving into the possibilities it presents for setting meaningful financial goals and redefining what it means to lead a fulfilling life.
How much money is life-changing?
A rule of thumb used by financial analysts is to save 25 times your expected annual expense.
However, this amount is much less than you think.
A 2019 OnePoll survey on behalf of Self Lender found that the typical American thought $19,800 was a life-changing amount. 22% of millennials believe that $5,000 or less might significantly alter their lives, with one in five believing that such an amount may shift their entire outlook.
What is interesting from the survey is how people planned to use the life-changing money.
- 31% of people surveyed said they would use it to pay credit debt
- 30% said they would start a new business
- 27% indicated putting the money in a retirement account
This conveys the notion that a life-changing amount would be used to solve practical problems rather than being spent on frivolities. Which brings us to the next section of this post…
Do you need money to change your life?
Sometimes we think we need a lot of money to change our lives.
However, responses from the 2019 pool cited previously and data from the United Nations World Happiness Report suggest otherwise.
The 2023 United Nations World Happiness Report ranked Finland as the world’s happiest country—for the sixth year in a row. The Nordic country and its neighbors Denmark, Iceland, Sweden, and Norway all score very well on the report.
Compare that to the rankings of more economically buoyant nations like:
- Australia (No. 12)
- Canada (No. 13)
- Ireland (No. 14)
- the United States (No. 15)
- the United Kingdom (No. 19)
In fact, none of the 10 biggest economies (based on GDP) were among the top 10 happiest nations in the world. Even Israel, which is embroiled in constant conflict, ranked No. 4 on the list.
Factors such as these were found to contribute to a happier approach to life.
- healthy life expectancy
- GDP per capita
- social support
- low corruption
- low level of inequality
- generosity
Psychological security and strong social connections – not money – were strong drivers of happiness in countries that ranked high on the scale.
5 Ways to Change Your Life (Without Money)
Let’s be real. Nobody’s going to knock on your door in the coming days and offer you the money that would change your life.
But that doesn’t mean you can’t live a more fulfilling life. In fact, money has never been a prerequisite to living a more fulfilled life.
While it’s important to have financial goals, it’s good to balance this with other factors that can help you live a more fulfilled life.
Let’s have a look at these factors:
1. Reflect on your financial goals.
Just for a time, let’s say that money was irrelevant.
- What would you change if you could?
- Would you invest in your education or personal growth, go on a global tour, or work on a passion project?
Think about your financial dreams and ambitions, big and small, for a while.
Think about how reaching these objectives would change your life and get you closer to your ideal of fulfilment and success.
2. Look beyond material wealth.
It’s important to understand that true prosperity transcends money, even while having financial independence can undoubtedly allow us to indulge in material comforts and luxuries.
Consider your life’s non-material sources of happiness, contentment, and significance.
Maybe it’s engaging in hobbies and interests, spending time with the people closest to you, or having a beneficial influence on your community. Think about how reaching financial stability can help you accomplish these non-financial objectives and improve your general wellbeing.
3. Redefine what success looks like.
In a culture where wealth and position are frequently associated with success, it’s critical to go beyond this restrictive definition and define success according to our own standards.
- What does success mean to you personally?
- Is it finding fulfilment and a sense of purpose in your work?
- Building deep and meaningful bonds with others?
- Changing the course of other people’s lives?
Your vision of success might be more comprehensive and satisfying if your financial objectives are in line with your values and priorities.
4. Set meaningful financial goals.
Now that you’ve had a chance to reflect on your financial goals and aspirations, it’s time to turn them into actionable steps.
Break down your goals into smaller, achievable milestones and create a plan to work towards them over time.
Are you looking to:
- save for a dream vacation?
- start a business?
- or build a nest egg for retirement?
Having a clear roadmap can help you stay focused and motivated on your journey towards financial empowerment.
5. Cultivate financial mindfulness.
As you work towards your financial goals, practice mindfulness and intentionality in your spending habits and financial decisions.
Take the time to evaluate your priorities and values and ensure that your money aligns with what matters most to you.
Consider the long-term implications of your financial choices and strive to cultivate a healthy relationship with money based on abundance, gratitude, and generosity.
How to Save a “Life-Changing” Amount of Money
Saving a “life-changing” amount of money requires dedication, discipline, and smart financial planning.
Here are some steps you can take to start saving a significant amount of money
Set clear financial goals: Define your financial goals and determine how much you need to save to achieve them. Whether you’re saving for a down payment on a house, a dream vacation, or retirement, having a clear goal will motivate you to save.
Create a budget: Track your income and expenses to create a realistic budget. Identify areas where you can cut back on spending and allocate more towards savings.
Automate your savings: Set up automatic transfers from your checking account to your savings account. This way, you’re less likely to spend the money before you save it.
Reduce your debt: Use a debt avalanche method to reduce your debt. This works by paying off high-interest debt, such as credit card balances, as quickly as possible. The money you save on interest can be redirected towards your savings goals.
Increase your income: Look for opportunities to increase your income, such as asking for a raise, taking on a side hustle, or selling unused items.
Invest wisely: Consider investing your savings in options that offer a higher return, such as stocks, bonds, or mutual funds. However, be sure to research and understand the risks involved.
Final thoughts
The question of how much money would change your life invites us to think beyond the confines of our current circumstances and envision a future of possibility and potential.
Many people dream of winning the lottery and taking home millions. But in reality, it takes a lot less money than that to change.
By setting meaningful financial goals, redefining success on our own terms, and cultivating financial mindfulness, we can create a life that is rich in both material wealth and non-material abundance.
So, how much money would change your life?
It’s up to you to decide—and to take the necessary steps to make it a reality.