Recently I was reading an article about a study that was undertaken to find out whether money can buy happiness. Do we really need a study to tell us that it’s nice to have money??!!! The article did make some valid points, however. For instance, the fact that increases in income tend to increase happiness but only up to a certain point. Additionally, it’s often what people did with their money and their general attitudes toward life that decided whether they are happy or not. Plenty of people with a lot of money are miserable for some reason or another, and plenty of people who don’t have a lot in the bank would describe themselves as generally happy. So, how do you find that happy medium between working hard for more money while also knowing when to stop and just smell the roses? Here are some ideas I try to live by:
- Forget about the Joneses. Keeping up with someone else’s style of life is the surest way to get in financial trouble. Why? Because for every Kim Kardashian there is a Bill Gates. No matter how rich you get or how much stuff you have there is always someone out there who has more. Chasing someone else’s dream life is not only an exercise in futility, but in the end you could be left unhappy anyway, because you never stopped to think about what it is that you really want out of life.
- Appreciate what you have. If you do not learn to appreciate the things you do have, you will never be satisfied with your lot in life, no matter how much you have. You will simply set yourself up for failure time and again, because guess what – humans have a great propensity to get quickly accustomed to the good things in life and take them for granted, leaving us desiring something more and better. Don’t get sucked into that vicious cycle. Think about how happy kids are with little more than a coloring book, and relax your expectations.
- Take time off. I think the US is one of the highest among industrialized countries in unused vacation hours. Whaaa…??? Why would anyone not take paid time off work??!! The more ironic thing is that we’re already behind many other countries in paid vacation time that is provided by employers, but apparently we’re not even taking what we’re given. You don’t have to go on a fancy vacation, but if you don’t take time to just hang out with family or friends, cook a nice leisurely meal, spend several hours reading a good book, go on a road trip, visit the neighborhood pool – then what’s life really about? There is no amount of money and stuff that can make one happier than just relaxing on a nice day. Nobody ever said while laying on their deathbed “I sure wish I’d worked more!”
- Replace things with activities. Admittedly, this bit of wisdom is coming from a recovering shopaholic. However, as I get older, I have realized that no longer do I enjoy the activities of 1) switching out Winter/Summer clothes because closet does not fit all seasons 2) freaking out about having too much stuff and not enough space to keep it 3) nearly breaking down in tears at how an entire day is lost to clothes sorting, and 4) swearing off shopping forever (or until that semi-annual sale at Nordstrom). Having too many things not only clutters your house, it clutters your brain, and makes you irritable and miserable. These days I much prefer to read a good book, write a blog entry, cook a nice dinner, have a happy hour with friends, and my favorite – travel!!! I think hubby and I have mastered the art of traveling quick and often. We’re the king and queen of the weekend getaway every couple of months. Doesn’t matter where! What matters is the change of scenery and the fun we have together. Also, I think it’s been scientifically proven that activities (rather than material things) provide a longer-lasting sense of happiness and fulfillment.
- Live within your means. A lot of people do not know what that is or how to calculate their “means.” Suffice it to say that if you’re struggling to pay bills and a large portion of those bills are for things you do not really need (brand new car rather than used one, astronomically large data plan, a house with too many bedrooms), you are living beyond your means. Also, if you’re paying such bills at the expense of a savings account, you are living beyond your means, because…
- Savings are important. And not just for the obvious reasons. The more intangible reasons why it’s good to have money in the bank are: 1) your subconscious daily stress levels will decrease knowing that you have something socked away for a rainy day, and 2) it’s amazing how the desirability of an item can decrease in reverse proportion to the freedom of choice you have. Having money in savings means you can choose to not buy something. Psychologically, I think this is very important. Just as a child who is told “no” wants to do the forbidden thing more than anything in the world, sometimes we’re desperate to have something just because we can’t afford it. So, driving my 12-year old car because I choose to, rather than having that decision thrust upon me by financial insufficiency, makes me feel empowered instead of limited. Having extra money gives you options and sometimes that is really all we need to feel content.
- Look for good deals. Many activities are often more cost-effective than just purchasing things, especially if you know how to look for discounts and good rates. At most gyms, if you sign a 2-year contract, you can enjoy working out, yoga classes, swimming, sauna, etc. every single day for about $50 a month. Library memberships are completely free and you can get as many books/movies/music as your heart desires. Most restaurants these days have happy hour specials on certain days and times, and you can spend hours chatting with a friend over a glass of wine and some delicious appetizers at a fraction of the cost. Sign up for rewards points and keep an eye on daily airfare and hotel specials if you like to travel and have a reasonably flexible schedule. Services like Groupon make it so easy to get good deals on anything from food, clothing, electronics, to massages or 2-week European vacations. Don’t be afraid to join a birthday club or “VIP” membership to a favorite restaurant or store – you could get anything from a free birthday dinner to discounts and samples. Don’t be lazy when it comes to saving money on things you enjoy – every little bit counts in the long run.
- Constantly manage your finances. You might think – what finances?? I live paycheck to paycheck! For most of us, our financial situation is not a static thing. You have times when you make or spend more or less money, for whatever reason. You have to always keep an eye on things like:
- Interest rates – if you have a credit card balance, call regularly and ask your lender to drop your rate. If you receive a lower interest balance-transfer offer, look into it and leverage to your advantage (just look out for hidden costs and fees). If you have not refinanced your house with a lower rate, it’s still a good time to do so – you could save thousands of dollars over the lifetime of your loan!
- Cable/phone bills – our cable service regularly increases our bill for no apparent reason, other than that they can. It’s never more than about $8 a month, so it would be easy to say – so what? I’ll tell you what – it’s our hard-earned money and we’re not going to just hand it over. At least once a year we call and threaten to switch providers if our rates continue to increase. Twice we’ve actually followed through on our threat and switched for a better rate. Yes, it was a bit of a hassle for a few hours switching boxes and what not, but it was worth it in the long run.
- Pay raises – if you are relatively content with your living standard and have come into a pay raise or bonus, figure out something that extra money can be allocated to – immediately. Do not wait until you have gotten into the habit of spending that money on something you obviously can do without, because you have been. Start with the most basic of things, like paying off a debt or starting a savings account. Set up an automatic system for transferring that extra money to where it belongs.
- Tax savings – if your employer offers a 401k with a match – take it! Even if you’re only putting a tiny bit of money into it every month, your employer is adding free money to it – you can’t afford to lose that benefit. Also, look into taking advantage of Flexible Spending and other similar accounts that allow you to save considerable amounts of various health and medically-related expenses.
In summary, money means nothing in and of itself. The key thing is what you do with it and whether you can cast aside societal expectations and really look deep within yourself to figure out your priorities.