Money and Happiness

The Truth About Money and Happiness

It is an oft repeated axiom that money cannot buy happiness. While this is certainly true, poverty will not buy happiness either. Some people become very wealthy, yet struggle to enjoy their lives. On the other hand, others manage to go through life with very few money problems simply because they are able to make the most of what they have.

Ideally you should try to combine both prosperity and happiness. To do this I recommend the following steps:

1. Learn to Value Simplicity

The aim of life should not be to accumulate as many possessions and as much wealth as possible. We should learn to be content with what we have and appreciate the benefits of simplicity. For example, if we clear out our unnecessary clutter we will achieve a greater feeling of space and freedom.

If you feel happiness is directly related to material possessions, you are making a mistake. Happiness can be gained just through being content with a small amount of possessions. Our inner wealth is not just about what we have, but what we are content to live without.

2. Do Not Be Attached to Your Money

Does it pain you to spend your own money – even if it is for something useful? Even someone like Bill Gates can feel uncomfortable spending his billions; it is said he used to always travel economy class because he didn’t see the need to spend more money on first class. The problem with this, however, is that if we are always reluctant to spend money we miss the whole point of earning it.

A good attitude is to see money as a circular flow – that is, spending money enables more to come into our lives. It is not like a big dam where we just try to hold onto it all. We need to let the money out by spending on useful and necessary things. It is no good having a stockpile of water unless we use it to generate power; similarly it is no use accumulating large savings if we we feel miserable spending it.

3. Minimize Money Worries

We will be happiest if we can make money a small part of our lives, and think about money issues as little as possible. To be able to do this we need to avoid creating situations of debt as getting out of debt can be difficult and stressful. Learn to live within your means by avoiding impulsive overspending. If you do need to go into debt, plan ahead and find a loan which is clear and manageable to repay.

Try to avoid complicated and risky investment plans; these give you the potential to gain more, but you will also have the potential to lose a lot more. Good financial planning should be simple and well balanced; this means your nerves will not be affected by worrying about the outcome of your investment. It is better to invest and save in something secure so you can forget about it and not worry endlessly.

4. Avoid Jealousy

No matter how much money you have, do you still envy people who have more? A recent survey asked people whether they would prefer to have a salary above the national average. Alternatively, they could choose to have a higher salary, but this higher salary would be lower than the average. A surprising amount of people chose to have a lower salary as long as it meant they were relatively better off than the rest of the population.

To me this makes no sense. If other people become wealthier than you, that is no reason to be unhappy. If other people are prosperous that is good; don’t feel miserable just because you cannot keep up with the Joneses.

5. Don’t Live to Work.

Do you find yourself working overtime in the evenings and at the weekend? If you spend all your time working, you will have no opportunity to spend your earnings. Don’t feel guilty for turning extra work down; it is important to give leisure time as high a priority as work. It is good if we can gain satisfaction from work, but if we only spend time working then our life lacks a proper balance.poor2.jpg

6. Understand Why Are Some People Always Poor

I’m sure most people will have good friends who always seems to have money concerns. No matter what happens they always seem to be short of money and they frequently share tales of financial woe. The lack of money makes them unhappy, but they don’t know how to change the situation. Giving them money doesn’t solve the problem because they continue to make bad financial decisions.

Part of the problem lies in their mindset. It is easy to become accustomed to being poor and then half expecting the poverty to continue. With this mindset, it becomes difficult to attract money into our lives and easy to develop feelings of self pity and regret. However, while we might be unfortunate it won’t do anything to resolve the situation. The secret is to try and change our habits and approach to money. Also, be wary about trying to convert others to better financial habits – it is almost guaranteed to fail.

7. Ignorance is Not Bliss

Another attitude to money is to try and avoid thinking about it. We ignore the true extent of our debts, spending and leaving unpaid bills. We frequently miss out on moving to better financial deals and make late payments which harm our credit rating. By ignoring money like this, we merely create more serious problems for the future.

Also, when we put off dealing with financial problems we carry the problem in the back of our mind. We can get no peace of mind because we permanently have a long list of things to deal with. It is better in these circumstances to promptly deal with things like paying bills and sorting out your accounts – then we can forget about them.

8. Develop A New Perspective

The following are some money related questions you should ask yourself:

  • Am I happy with my financial situation?
  • Would more money make my life better?
  • Do I always have financial problems hanging over my head?
  • Is money the most important thing in my life?
  • Is the pursuit of money making me miserable?
  • Would I sacrifice principles to make more money?

Even just answering these questions honestly may encourage a new perspective towards money.

Tejvan Pettinger works as an economics teacher and writer. He writes on issues of personal finance at his blog Simple Finance – helping to simplify finance. Images from Velo City and iStockPhoto.

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  • http://www.changeyourtree.com Kevin @ Change Your Tree

    All excellent points. I really enjoyed this article.

  • http://www.mysuperchargedlife.com Jeff@My Super-Charged Life

    I like the statement, “Ideally you should try to combine both prosperity and happiness.” Apparently, this is harder to do than one might imagine. All you have to do is look at Hollywood as an example. Many stars are very wealthy, but apparently not so happy. Their lives are often in shambles.

    I think that you hit on a key point for being happier when it comes to money and possessions which is avoiding jealousy. Comparing ourselves to others is a dangerous trap because there is always someone with more or better things than we have. Practicing gratefulness can really help in this area.

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  • http://www.marelisa-online.com Marelisa

    Money is great: you can use it to travel to far away places, get the best education available, help out your loved ones if they need it, contribute to charities that manage their funds well, buy as many books as you want, and so on. Money is simply a means to making the most of yourself. As long as you have a holier-than-thou attitude towards money, money will have a holier-than-thou attitude towards you (by having negative feelings about money you’re repelling money).

  • http://livewhatyoulove.com/ Chrissy

    I also enjoyed this article.
    I’ve been searching and searching to find my path, and I truly found it because of these two books, Live What You Love & Changing Your Course by Bob and Melinda Blanchard.
    Live what you love, is a true inspiration for me. I have also given this book to about 5 of my friends to encourage them to live what they love. I love the exercises throughout.
    Check it out, my friends are loving it!

  • http://financialphilosopher.typepad.com/thefinancialphilosopher/ The Financial Philosopher

    Great post! It inspires the pursuit of self-awareness…

    I’ll add a few things…

    The word happiness implies a “state of being” that is often short-lived and not perpetually sustainable. “Well-being” is a more useful term because it implies a “trait” rather than a state.

    Well-being radiates from inside and, with proper habits, can eventually feed itself while happiness consumes itself. Well-being requires mindful attention to the present moment and self-awareness while happiness may not necessarily carry forward to the next moment…

  • http://www.selfgrowth.com/experts/stanley_f_bronstein_mr_achievement.html MrAchievement.com (Stanley Bronstein)

    As an attorney who works with high achievers, I have observed many people who share one trait. No matter how successful they are; no matter how much money they make; it is NEVER enough.

    They rarely do anything with their money to help others, as they’re too busy trying to accumulate more.

    Don’t get me wrong. Money is nice and I love it. The reasons why I love money is that it not only allows you to live a great lifestyle, but it also puts you in a position of being able to help others. We have an obligation to return a portion of what has been given to us.

    Many people instinctively know that lesson or they learn it during the course of their lives. Sadly, many others do not . . .

    MrAchievement
    Stanley F. Bronstein
    Attorney, CPA, Author, Blogger & Professional Motivational Speaker

  • http://freeflowlife.wordpress.com Simon

    As with most things in life, the influences and the eduction we have early on can impact how we act as adults. This is no different with money. In terms of my own personal development this has been and continues to be one area of real challenge and growth. I really like the quote from Lao Tse “Your actions are your only possessions”. This helps to focus me on what really matters.

    Simon

  • Kay

    My idea of being content is that I always remind myself of my past where I was and compared to that how well I am financially apart from the fact many other blessings that I have in life. Being spiritual has certainly helped me to have a better perspective on many issues in life even if they ar enot upto my liking.

  • Kay

    My idea of being content is that I always remind myself of my past where I was and compared to that how well I am financially apart from the fact many other blessings that I have in life. Being spiritual has certainly helped me to have a better perspective on many issues in life even if they are not up to my liking.

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  • markk

    //A surprising amount of people chose to have a lower salary as long as it meant they were relatively better off than the rest of the population.//

    Not very surprising to me. Wealth, it seems, is relative – several centuries ago, a man would feel rich if he had a house (of course, far from today’s standards), 3 meals a day, spare money for alcohol or whatever he liked. Today people are like a hundred times wealthier and still say “I want more! I’m poor”.

    The reason for that is people have the tendency to compare themselves with the better ones. They completely forget that apart from their local environment and country, there are other countries, poor countries, where the main concern is to survive to the next day.

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  • Randy

    “but it also puts you in a position of being able to help others. We have an obligation to return a portion of what has been given to us”

    For one, I don’t agree with statements like the above. It implies either a guilt complex or a messianic/do-gooder type of issue. We give back and return favors to others simply because we enjoy contributing. That’s a part of the fun in life.

    As for money itself, have many have given up art, music, studying history/philosophy, writing a book, dance, etc, for accounting or nursing for reasons other than financial? Now, give those persons an annuity, which pays a normal annual salary of an accountant, and they’d be quite happy doing what they enjoy.

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  • cjniya

    How to gain happiness? Happiness is not the word that print on rubber wristbands. It is easy to gain, but we do not know it. Someone think that fortune could give us happiness; someone said the good-looking is the source for happiness and others consider the success is the main role in the happiness. Let’s talk about the dogs’ life first. There are so many dogs in the city, some of them are the lucky guys and some of them have to wander in the city. Some of the stray dogs could get the blood certificate but their owners do not like them so they just threw these noble dogs to the street. The excellent appearance could not change their tragedy life. For dogs, good-looking is not the key to happiness.
    Then there are some dogs that lead a rich life, their owners are rich and could offer them the high quality food. They have been trained to be the guard dogs and they have to stay outside the house all day long to perform their duties. They do not know the warm of the family, they are rich, but they are just the tool for their owners. And there are some dogs that live in the ordinary families, which could not afford the high quality food or toys for them. But they just consider the dogs as one member of the family and play with it. Every day their owners would have a walk with them, they also talk to them. Don’t you think these dogs are the luckiest and happiest ones? They have a family.
    And in my opinion, that is the key to happiness—- the warmth from the family. No matter how poor you are, no matter how ugly you are, family is the softest place for us. When we feel bad, we could go back home and find the comfort in our parents. We might not be accepted by others, but our parents, our families would behind us and support us forever. The real happiness is having a warm family.

  • http://www.spreadinghappiness.org Nick1254367

    Hi,

    interesting thoughts!

    I believe it’s not possible to make a general statement on whether money makes people more or less happy. Money comes with a whole set of new elements that may have good or bad impact on our happiness, and depending on how susceptible we are to every one of them, the conclusion will go one way or the other (i.e. different from person to person).

    I recently made an effort to provide a more comprehensive picture of what these ad- and disadvantages are. I invite you to have a look at Money and Happiness and tell me what you think!

    Thank you,

    Nick

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  • http://www.ancientkeysofjoy.com Authentic Happiness

    Very good article :-)

  • Anna Akobyan 92

    it is a good instruction for all of us to make our lives happier without money problems

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  • Shi Yu

    Whatever you do, It’s due to your attitude of life. whatever you like it or not, please study to  be stronger!

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  • Stirred

    Not one comment about inflation, diminished purchasing power, Rising food costs, 401k fees eating away your retirement savings, medical care costs, basic distrust of how much you think you will need to live, and to retire. How can you budget for a stable life when you cannot forsee utility costs jumping far higher than you thought, a loaf of bread and some produce is now $20 or more, the basics of staying healthy, eating healthy, paying housing costs, making a living, are not so steady or predictable. Studies now show that even affluent people fear not having saved enough for retirement because they fear a big personal crisis, like medical or health needs, or some other emergency, could wipe out a chunk of savings. We live in America. You have a crisis? You hope your insurance doesn’t screw you over, and if it does, you are totally on your own. Good luck recovering losses, good luck with your nursing home, hope you can afford trustworthy care givers vs bottom of the barrel econo-assistants on minimum wage.

    THIS is one reason people feel they will never have enough money. We can’t live with our heads in the sand much longer. Money crises are growing, and it’s not because the savers are greedy. Our policy makers are greedy. They impact everyone while they make deals to benefit themselves. You all know its true.

    Now, to be happy? Live well and die relatively young