Quality Of Life

AAA

DEFINITION of 'Quality Of Life'

A highly subjective measure of happiness that is an important component of many financial decisions. Factors that play a role in quality of life vary according to personal preferences, but they often include financial security, job satisfaction, family life, health and safety. Financial decisions usually involve a tradeoff where quality of life is decreased in order to save money or, conversely, quality of life is increased by spending more money.

INVESTOPEDIA EXPLAINS 'Quality Of Life'

Commuting to work provides a good example. It is possible to save money on housing by living further away from popular job centers and commuting to work. However, commuters don't have as much time to spend with family or on hobbies because of the extra time spent sitting in traffic. Some people consider this tradeoff worthwhile, while others choose to maximize their quality of life by spending more money to live closer to work.

Quality of life is also an issue when developing a personal savings plan. In this case, the tradeoff involves a sacrifice of current quality of life in order to improve future quality of life.

RELATED TERMS
  1. Elm Street Economy

    The Elm Street economy is a contemporary economic movement that ...
  2. Disposable Income

    The amount of money that households have available for spending ...
  3. Affluenza

    A social condition arising from the desire to be more wealthy, ...
  4. Downshifting

    The act of reducing one's standard of living for an improved ...
  5. Personal Income

    Total compensation received by an individual. Personal income ...
  6. Discretionary Income

    The amount of an individual's income that is left for spending, ...
Related Articles
  1. 5 Signs That You're Living Beyond Your ...
    Budgeting

    5 Signs That You're Living Beyond Your ...

  2. The Beauty Of Budgeting
    Budgeting

    The Beauty Of Budgeting

  3. Are You Saving Too Much?
    Retirement

    Are You Saving Too Much?

  4. Bankruptcy And Your Credit Score
    Credit & Loans

    Bankruptcy And Your Credit Score

comments powered by Disqus
Hot Definitions
  1. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  2. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  3. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  4. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  5. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  6. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
Trading Center