5 Numbers More Important Than Your Income

As my friend Mel says, “Numbers are sexy.” We love talking about numbers and tend to fixate on them — particularly when it comes to how much we earn. “I’m a six-figure freelance designer,” or, “If I take this job, I’ll earn $10,000 more.” 

We oftentimes measure our worth based on how much money we rake in. It can be easy to feel like you’re behind, or a grade-A underachiever when your cousin or bestie or partner makes more than you. Sure, your income is important, but there are other numbers that deserve a closer look than how much cash you earn. When it comes to financial wellness, here are five metrics that trump your income.

1. Cost of Living Index

Bottom line: the salary you earn living in one part of the county might not stretch as far living in another part of the country. It's like how we always say "if we earn in Singapore and retire in Malaysia, our money will last us 3 times longer". But if you earn in Singapore and retire in Singapore, the budget might be tighter. The same applies if you earn in Malaysia and retire in Malaysia.

How much you make is relative to a number of things — one being the cost of living in your stomping grounds. So the next time someone says they’re making $120,000 but live in Silicon Valley, chances are they aren’t enjoying the same standard of living, than those in less-expensive parts of the country. 

2. Compensation Package

When it comes to your work salary, it’s also important to look at the entire package, including the benefits you will be getting. Your employee benefits can make up to one-third of total compensation costs. That includes health benefits (medical coverage), corporate discount (mobile plans, gym memberships, etc), and group rates on things like car insurance, life insurance, and even financial and legal advice.

Besides your take-home pay, you’ll want to factor in the full suite of benefits that your employer offers. In turn, that makes a difference as to how much you have to work with each month.

3. Happiness Report

Yes, happiness is a difficult thing to pinpoint. But in recent years metrics have been developed to gauge how happy nations are as a whole, giving us a good idea of wellbeing and work-life balance.

The U.N.’s World happiness report uses data from the Gallup World Poll, which surveys citizens in 156 countries on how happy they feel — to determine the overall well-being of a country’s denizens. The Cantril Ladder, or Cantril’s Self-Anchoring Ladder of Life Satisfaction, is made up of 10 rungs. The bottom of the ladder equals 0 and represents the worst possible life for you. The top of the ladder equals 10 and equates to the best possible life for you.

Per the Gallup World Poll, Finland, Norway, and Denmark, respectively, ranked highest for happiness. The bottom three countries were Afghanistan, Central African Republic, and South Sudan. Where does Singapore fall? 34 out of the 156, not too bad. 

Consider doing your own happiness assessment using the Cantril Ladder. Are you living your best life? What does it exactly mean for you to be living your best life? What steps can you make in the right direction to boost your well-being?

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4. Net Worth 

Remember: Your income isn’t a measure of your wealth, your net worth is. To figure out your net worth, tally up your assets — this includes your investments, how much you have sitting in your savings, and any other assets, like your home or car. Next, tally up your debt. Subtract your debt from your assets and you have your net worth.

Net worth gives a full picture because it factors in how much money you make, how much debt you owe and how quickly you’re paying it off. It’s what you have left at the end of the day that’s for Future You. Having a positive net worth shows that you’re financially healthy. 

5. How You Spend Your Money

Are you putting your paycheck toward paying off debt, helping your family, or are you squandering it? Not only does how you spend your money affect your progress toward net worth, but it’s ultimately an indicator of what you value.

For instance, while I am typically pretty frugal when it comes to clothes, I spend more on good food. There are no right or wrong, it is just a personal preference. Just make sure that you are not overspending or exceeding your budget to indulge in the things that make you happy.

There you have it. Five metrics that are more important than your income. As you can see, while your take-home pay does play a key role in your financial well-being, there are other ways to measure your financial success.

This article was originally published at HiCharlie.com.

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