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We are happiest when we’re paid by the hour

Using cross-sectional data from the US, two studies found that income was more strongly associated with happiness for individuals paid by the hour compared to their non-hourly counterparts.


Strange, right?

You’d think making bank would make you not care whether it’s a salary or not.

Although I know this does not mean you should all rush out and become a freelancer. You can still work at a job but get paid by the hour, when you are able to file for overtime for instance, I am definitely a convert.

A salary tells me: I pay you by the dates, by the year, so your hours don’t really count.

This is why if you are in a salaried position, DO NOT waste your time (AND MONEY) being there for more than what you are paid for — 40 hours a week. 50, max — unless you have something serious to gain.

You will always regret all the sweat, blood and tears you put into your company with absolutely no return on their end except the expectation that you’ll keep doing it.

So don’t work overtime and weekends without a clear gain in sight — e.g. you will get a promotion, the boss will give you more money, etc.

As a freelancer, I also envy sick days because I’m very careful not to get sick and lose money.

Via. Best comic series ever.

Want to know what else makes you happy?

Above making $75,000 a year, people really aren’t that much happier

My theory on this is that they probably follow an ideal household budget like what I’m doing for 2013 where I budget like a freelancer.

They spend a certain amount net per year, and the rest, gets banked.

Read: How much do I secretly want to save each year?

Therefore, we don’t get to experience the “happiness” above $75,000 because it’s the same spending on the same stuff to us.

My other theory, is that people who make a lot of money, trade off a lot, such as their time, being away from their families, or just being sleep-deprived, which brings me to the next point…

As for the time a job takes, sleep-deprived professions are also some of the ones that are the unhappiest

  1. Home health aides
  2. Lawyers
  3. Police officers
  4. Physicians


There are also other factors that go into how happy you are at your job.

Read: Who really hates their jobs?

You need a job where you can excel and use your talents

This comment really stuck with me, when Kerry pointed out that you need to have a career that you can do a bang-up job in by using your skills and talent.

This is probably the truest (aside from the money and the amount of time I don’t have to work), thing for me to choose between one project or another… or not working at all.

(Yes I turn down contracts I think will be awful, brainless work, and wait for something better because I’d rather not work than take on a stressful, bad contract and be utterly resentful the entire time.)

I need a job where I can do what I do best. If you don’t let me do my job the way I want to do it, I get really frustrated and angry.

Or SCREW IT ALL, and just outsource your job to China

(Okay I’m being a BIT glib in saying that…)

From The Register:

A security audit of a US critical infrastructure company last year revealed that its star developer had outsourced his own job to a Chinese subcontractor and was spending all his work time playing around on the internet.

The VPN traffic logs showed a regular series of logins to the company’s main server from Shenyang, China, using the credentials of the firm’s top programmer, “Bob”.

[Bob] was paying them a fifth of his six-figure salary to do the work and spent the rest of his time on other activities.

(That’s about $20,000 if we assume he earns $100,000 a year)

In his performance assessments by the firm’s human resources department, he was the firm’s top coder for many quarters and was considered expert in C, C++, Perl, Java, Ruby, PHP, and Python.

Hat tup to The Monevator

Can you imagine?

Actually what I can’t imagine is spending your whole day and wasting your time for years, by just browsing Ebay, Reddit, Facebook, and watching YouTube cat videos. I’d be bored out of my skull.

Still, he was certainly no slouch in the organizational behaviour and negotiations department to get a 6-figure salary, then figure out a way to get someone else to do the work for him.

So would you want to be paid hourly? Yearly?


  • Sue | London Life Coach

    I agree… Find a job where you do best because you will feel happy when you feel that you’re the best. They say, find a job that you love doing and you will never feel like you’re working. Remember that you work because you want to enjoy the perks of life. How will you do that if you spend all your time in work? Create balance. Work and have fun.

  • PK

    “expert in C, C++, Perl, Java, Ruby, PHP, and Python” – Epic. From where I sit right now, I’ve never used Ruby of that list – should I hire someone?

  • Elle

    When I was applying for employment insurance (after going on stress leave) and calculated what I made vs how many hours I put in – to my dismay I concluded that I make the same amount as when I was a supervisor at a coffee shop per hour.

    I then concluded I wasn’t going back to work there.

  • femmefrugality

    I’ve found that for some weird reason, this is true with me, too. But when I’m salaried I’m usually making more, have better benefits, etc. So I break down what I make an hour in my head. And that makes me pretty happy. But I’m still not prone to do an extra hour of work. :p

    I can’t believe that guy got away with that! Do you think he got fired when he was discovered? And that they just hired the Chinese guy in his place?

    • saverspender @ save. spend. splurge.

      @femmefrugality: I think if you break it down by hour, you feel happier 🙂 Of course, overtime would be sweet too.

      He got away with it for a while, but he was DEFINITELY fired when discovered (or promoted to head of Human Resources).

      It wasn’t just one Chinese guy he hired, it was a whole team apparently, each guy there was an expert in each language, and he just sent them projects as they came along, and they’d assign a worker to each project and charge per project.

  • Ree Klein

    I was a salaried worker for…well, let’s just say MANY years! An executive once told me that when you’re salaried “overtime” means “all the time” and overtime is expected when you are salaried.

    That said, I was very fortunate to have work I generally liked doing. I worked a ton of overtime but I always saw that as a means to shine and I was given lots of opportunities others didn’t get.

    Am I glad that part of my life is done? Yep. But my home is paid off, I have money set aside for retirement and now I can focus on doing what I love.

    Not to say that path is right for everyone, but it was for me. (Side note: How brilliant, yet devious, was that guy who subcontracted his work?!??!?!)

    • saverspender @ save. spend. splurge.

      @Ree Klein: Overtime is definitely part of the job. Sometimes the overtime goes right into the weekend and that’s when it starts to grate on your nerves.

      I love what I do, but it doesn’t mean I accept the conditions to get paid less and work more for the same amount of core work.

      (Yeah he was pretty smart, but too bad he mostly watched cat videos on YouTube and Facebooked his days away)

  • Michelle

    I don’t really know how salary works, but from what I see, they can’t leave until the job is done… and that is more than 40 hours per week. Is that true? Will they yell at you if you work there for only 40 hours?

    • saverspender @ save. spend. splurge.

      @Michelle: I think they do look down on you and “yell” when you are only there for 40 hours and no more.

      You can’t leave until the job is done, no matter how long it takes. This is why I hate salaried positions. I used to work 60-80 hour workweeks, getting paid 1/4th of what I get paid now per hour.

      I know that co-workers always try to stay late to look good to the boss, or rib you when you leave early because if you leave early you aren’t working as hard as they are. It’s all crap.

  • nicoleandmaggie

    That doesn’t mean that people with hourly wages are happier– that means income more strongly predicts happiness for hourly workers, There’s a difference between the headline and the statement at the beginning of this article.

    Given that hourly workers are usually lower wage (high income hourly workers are an unusual subset), that would make sense with a simple model of diminishing marginal utility– money increases happiness more for lower earners and flattens out as income gets higher (around 75K, as you point out). So increases in income are more tied to happiness when you make less than when you make more, mechanically.

  • cj

    A fascinating post, Mochimac!! You are careful not to get sick which means that you take care of yourself as people ought to. Working for oneself or having an hourly wage promotes this. I work for myself so I am not likely to take off to get my nails done or go 4-wheeling with the boys. No that I ever do these things.

    I am a far more reliable worker for myself than I was for someone else who I knew would pay me unless I slapped a student or something really horrible. And coincidentally, I work half the hours for the same pay, so I have as much time as I need to pursue what I want.

  • Cat Alford @ Budget Blonde

    That’s so interesting. I actually enjoy getting paid by the project when freelancing, because I can often get things done faster than I would on an hourly rate. Not sure why it works but it does. 🙂

  • Jane Savers @ Solving The Money Puzzle

    I am and always have been paid hourly. Sometimes I can sneak in an extra 5 minutes of time and I notice it in my next pay.

    More money would make me happier because it would take away worry.

  • SarahN @ Livetolist

    It infuriates my bf that I’m ‘happy’ with my current salary (6 figures), and aren’t chasing ‘more’ money. But I cover my bills and do what I like with life, so I can’t see why I should push harder. That being said, whilst I’m on a salary, I get overtime (bonus!) so I sometimes take it thinking ‘I could save more on my mortgage/interest’. Balancing act really – sometimes I prefer to have the ‘spare’ time.

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