Check Your Relationship to Money & Happiness
“Money Can’t Buy Happiness”, is a common idiom we quote, but do not seem to believe. Somewhere in the back of our minds, we think that the next promotion or the new job will somehow make our lives fuller and more meaningful. We tell ourselves that if we only earned more money, we would not struggle financially, and would gain freedom and happiness.
But is it true? Most often the raise comes, or the new job unfolds, yet our level of happiness and financial struggles remain the same. Is it possible that there is a deeper, more convoluted reasoning behind the cliché? We are, after all, always chasing more money. We convince ourselves that if we only increased our income by another 10%, we would have enough.
The truth is, money is only a tool and has very little connection to our satisfaction with life. However, the attitude we have towards money can shape our financial habits and impact how we feel about the state of our financial affairs.
Connecting Happiness With Pleasure
Pleasure is easily gained and easily lost. It is affected by every whim that comes down the road. When money is used to obtain pleasure, it can spiral out of control, leading to higher spending in search of more pleasure, ultimately, leading to uncontrolled debt.
Joy, however, is lasting and poignant. It’s not about having more money; it’s about aligning financial priorities with spending habits.
Manage Your Money Before It Manages You
Desires come with short term and long term priorities. The superseding of short term emotional needs can lead to delays in long-term goals. Whether you want a secure retirement or a larger home, they take time to achieve. Are we letting short-term spending rob us of long-term desires?
Impulsive spending often comes from environmental and social influences. Television ads, store sales, and what “the Joneses” have, promote happiness through products and entice us to look for short-term solutions to long-term desires. When we give into these external pressures, money manages us, instead of the other way around.
When we recognize money as a tool, we are better able to direct spending towards our highest priorities which will lead to a stronger financial outlook, without the feeling of sacrifice that comes from relying on willpower to control spending.
8 Steps for Financial Balance & Happiness
1) Identify Priorities. What are your deepest long term desires and what will they cost to achieve? Review the list. Does each item bring joy or stress? They can be physical goals such as buying a home or less tangible, like financial security. Put a number to each priority, making the goal measurable.
2) Review spending choices. Once you recognize where to focus your attention, you can weigh spending choices against your highest priorities. Avoid spending that delays or takes you away from the long-term desires, and pursue that which bring you closer to success.
3) Time is more valuable than money, so prioritize. You can always make more money, yet you can never get more time. Everyone has the same 24 hours. How you spend your time should align with your priorities. Money is fluid. You can sell time for money, but you can’t sell money for time.
4) Evaluate stress levels and what brings on more stress. Accumulating possessions, keeping up with neighbors, and trying to impress others can cause a great deal of unnecessary stress. There are always those with more and those with less material wealth.
5) You don’t know the “Jones’” situation. Keeping up with the Jones’ is a practice in futility. It is common to compare others strengths with your weaknesses, making every comparison and apples to oranges evaluation. You never know if they are in over their heads or paying cash for what they own. In the end, it doesn’t matter, because you are not liable for their bills and they are not liable for yours. Envy is a total waste of time.
6) The vicious cycle of spending versus income. When a raise or promotion comes your way, you have every intention to use it wisely. Yet somehow, you don’t even notice the increase because spending tends to rise with income. When you see something you want, and justify the purchase because you have more income. Break the cycle by making spending decisions ahead of time and putting money towards long-term goals first.
7) Understand the role money plays in your life. Spending habits can have deep emotional roots. Do you spend money on your children out of guilt? Do you buy more when you are happy or sad? Do you believe all rich people are lucky, or all poor people are lazy? These subconscious spending habits and beliefs can rob you of financial security and limit potential with invisible but real financial ceilings. Emotional triggers often create subconscious spending choices you barely recognize. Learn from your past experiences with money and apply the financial lessons for a brighter tomorrow.
8) Invest in things consistent with your priorities. You have the power to control the money passing through your account. A proactive approach to rectify past financial mistakes and clear priorities for your future will lead to financial successes. They will not come from accumulating more stuff or buying more experiences.
Gretchen Rubin, author of The Happiness Project, said it best, “No, money cannot buy you happiness, but money can buy you a lot of things that contribute mightily to happiness.” It’s less about what you buy, than how you buy. Spending money in a way consistent with your priorities will lead to higher levels of happiness and satisfaction. If you want to get out of debt and live a debt free life, ensure that spending is consistent with this goal. Stocking up on collectibles that collect more dust than memories, will not lead to higher levels of happiness. Neither will buying a bigger home or a more expensive car. These purchases can add to stress and reduce levels of satisfaction. On the other hand, earning less than you need for basic essentials can lead to higher levels of stress in the search for higher income. Finding the balance between living within your means and obtaining what you need, will lead to the highest levels of satisfaction.
Ryan Sasson is the CEO of Strategic Financial Solutions. He co-founded the company in 2007. A native New Yorker, Ryan has almost two decades of experience starting and growing businesses in the region. Before founding Strategic, Ryan was the president and founder of Timberline Capital, one of the largest Merchant Cash Advance companies in the country. Ryan is a member of YPO Metro and in involved with multiple charitable organizations. Ryan holds a Bachelor of Science in Business Marketing and Business Management from Tulane University and is currently enrolled in the Presidents Program at Harvard Business School. Say hello & connect with Ryan via LinkedIn, Twitter, Facebook.