A decade ago, I worked as a producer at CNN Business FD. News while I went to seminary school at night. Few of my journalist friends understood my interest in theology. Few of my classmates understood my interest in Wall Street. But having a foot in each world taught me a crucial lesson about money and its meaning: You can’t separate them.
Think about the definition of cash—a dollar represents value. But understanding what personal value a dollar holds for you can be life-altering, because most of us structure our lives around money—it affects the choices we make and the people we become. The trouble is, money, or, more specifically, wealth is too often defined as a numeric formula—the difference between assets and liabilities. Even if you understand the numbers, it’s tough to know what they mean to your life.
I believe true well-being comes when your financial decisions reflect what's most important to you. So instead of beginning with a number, it makes more sense to start down the path to prosperity knowing what you value, which comes from who you are, not what you have. After all, I've met people who are rich and miserable and people who are poor but lead joyful lives. The only way to evaluate your own money-happiness relationship is to target what wealth means to you, then see if your circumstances jibe with that definition.
Take me, for instance: I value education and the freedom to choose work that reflects my abilities and interests rather than simply my financial needs. In my case, real wealth means being able to send my three kids to the colleges of their choice without racking up a mountain of debt. So I set up a savings account when each child was born and put money away every month. Do I ever wish I could blow the cash on a personal trainer or a week in the Caribbean? Sure. But I know that in the end, lasting happiness will come from my achieving this life goal. So I run in the park, take day trips to the beach and visualize my girls in their caps and gowns, choosing work they love without worrying about paying off any student loans. This fantasy reminds me that I'm rich in a way that matters to me.
Of course, the things we value can sometimes be tricky to identify; it’s easy to confuse them with wants (for example, ("want this Prada bag”) or less tangible needs (“I need air-conditioning on such a sweltering day”). But ultimately, values—the things that matter most to us—run deeper than material comforts. Recently, I asked more than 100 women, ages 21 to 50, to name the three things they cherish most. The vast majority listed family (81 percent); 49 percent said friends and 42 percent said health—all things money can't buy. Next came happiness (17 percent) and faith (10 percent). What would you have answered? Does your current lifestyle reflect what you care about most deeply? To find out, try this exercise. Start by listing all the things you did today and your reasons for doing them. Use the examples below as a guide.
Activity: Got up at 7 A.M. and went to the office
Reason for activity: Had to go to work
Activity: Went out to lunch with work friends
Reason: Enjoy socializing
Activity: Went to gym after work
Reason: Like to stay in shape
Activity: Went to bed at midnight
Reason: Wanted to get seven hours of sleep
Now, think about your reasons for these activities. If you get up and go to work because you enjoy what you do, for instance, consider why that is—perhaps your job offers you the chance to do things you're good at in collaboration with like-minded people. Strike a chord? You've just identified one of your values: the opportunity to use your skills in a satisfying environment. If you said you work so you can pay the bills, on the other hand, and you have to pay the bills because it’s important that you be responsible for yourself, you've identified another value: responsibility. In this case, though, you might want to consider whether this particular job is the best way to achieve that goal. If you reduce your spending, for instance, you might be able to take a job that pays less but is more meaningful to you, to accommodate values besides responsibility. Remember: The journey to money and happiness begins when you pinpoint what is crucial to you, the deeply held principles that promise a more satisfying life. It takes courage to align your money with them, but it’s worth it.
How to lead a richer life
Once you've identified your values, you can explore how to honor them while being realistic about your financial situation. That’s how I ended up in New Jersey. Living there, I’ve found, can be expensive and requires certain financial sacrifices. My sister's house in Iowa has twice the space and cost half as much. I pay three times what she pays in real estate taxes and more for utilities, even though it snows in Iowa for, what, eight months of the year? So why New Jersey?
The main reason is I’m only 40 minutes by train from Manhattan. When I was 21, I visited a friend there and was so enthralled, I spent the rest of my vacation on the phone trying to land a job. I moved to the city four months later and stayed for 15 years. Then some serious competition showed up in my life that rivaled my love for the city—my kids—and my values began to conflict (e.g., kid-friendly suburbs versus exciting city living). I felt the suburbs offered a better life for my children—more space, good public schools. I cherish the quality of my environment, but I value the quality of my kids’ environment more. So I found a relatively diverse suburb a short train ride from the city. And that’s where I put my money.
Clearly, values can shift as you make life changes. In college, for instance, you may put a premium on independence. But when you find a life partner, you might decide to put a higher priority on compromise. The more you're able to alter your money habits to reflect these changes—say, devising an equitable way of sharing bills with a mate—the happier you'll be. If my income drops drastically someday, I may have to realign my values again, because living within my means is more crucial to me than living near New York City. Look out, Iowa!
Does more money add up to more happiness?
Nearly 2,500 years ago, Aristotle said that the happy man will need external prosperity. But how much prosperity do we need to be happy? Over the past three decades, researchers have devised rigorous experiments to find the answer to this question, and one conclusion seems universal: A certain amount of financial security does indeed make people more content. Those in wealthy nations with enough to eat and a warm place to sleep are happier than people in poor countries without the basic necessities. After that, the link is more tenuous: Big jumps in economic growth in developed nations such as the United States and Japan have been accompanied by only slight increases in joy. In a now-classic 1978 study done at Northwestern University in Evanston, Illinois, researchers surveyed people who had won $50,000 to $1 million in the lottery within the previous year. Compared with a control group, the jackpot winners were no happier with their life than non-winners. More surprising, they took less pleasure in their day-to-day activities than the average Joes. “People don’t realize that as their income goes up, their aspirations also go up,” explains Richard Easterlin,Ph.D., a professor of economics at the University of Southern California in Los Angeles. “When people are in good health,
they don’t necessarily aspire to better health. If they have a happy family, they don’t aspire to have two families. But in the case of material goods, most of us assume we're going to be happier if we get more. We end up going after a goal that’s biased toward money at the expense of other life pursuits.” That makes sense to me. I distinctly remember how thrilled I was when we finished renovating our kitchen, as I ran my fingers across the silky countertops and gleaming maple cabinets. We even opened Champagne to celebrate. But within a year, I caught myself thinking how nice it would be to have a larger space. It’s human nature to always crave just a little more.
Breaking the wanting habit
Often, we don’t realize we're running on the more-more-more treadmill until something knocks us off. Take Sharon, a 45-year-old mother of two in suburban New York City, who preferred not to give her last name. Following a company merger, her husband took a severance package and traded in his 14-hour workdays for a different life—one that would give him more time with his wife and kids. A few months after he quit, Sharon was diagnosed with breast cancer and her husband was able to take care of her and the children while she recuperated. “We knew he could afford a few months off until we got our lives together,” Sharon explains. “The timing was perfect.”
Then the timing was perfectly awful. Sharon’s husband got back in the job market a month before the September 11 terrorist attacks. With the local economy devastated, he tried working on his own as a consultant, but a client failed to pay for some of the work and the matter went to court—adding legal fees to the family’s looming debt. Sharon says she longs to move to a better school district, to travel, to get a new car, but she can’t afford it. “I know I'm very lucky. I have my health and a great husband and kids. I do consider myself happy,” she says. “But when people say money doesn’t buy happiness, I think that’s a load of crap. I could be a lot happier if I had money—the bills would be paid and I wouldn't be stressed.”
Certainly, unpaid bills can be a major source of anxiety, but Sharon might feel less stressed if she didn’t also yearn for a more expensive life. How then can she—and the rest of us—stop the wanting cycle and learn to be happy with what we have?
One solution is to shift your activities away from money and toward things you consider important. If it’s your health, spend more time at the gym. If it’s your home, tackle cleanup projects. Sharon, for her part, started volunteering, visiting breast cancer patients in a local hospital and raising money for cancer research. She’s doing the right thing to lift her spirits, according to experts. “Besides having a host of [positive] social effects, kind acts make you see others and yourself more favor-ably,” says Sonja Lyubomirsky, Ph.D., associate professor of psychology at the University of California at Riverside. Changing how you talk about money can also increase your happiness, says David G. Myers, Ph.D., psychology professor at Hope College in Holland, Michigan. Unless you're truly poor, he says, “it’s possible to recast your negative thoughts more positively, so that ‘I can’t afford it’ becomes ‘I choose to spend my money on other things.’” As Myers points out, often you can afford it—the second car, the flat-screen TV, the vacation—if you make it a priority. “The choice is yours. Saying ‘I can’t afford it’ denies that choice, reducing you to a victim.”
Why time really is money
Another way many of us unconsciously victimize ourselves is when we trade time for money. Researchers at the University of Texas at Austin analyzed a survey in which 800 people were asked if they’d accept a more lucrative job with longer hours, even if that meant they'd have less time with family. About two thirds said they were “very” or “somewhat” likely to take the job; nobody said it was “very unlikely” they'd take it. In other words, most Americans appear to be ready to sacrifice family time for more money.
Maybe the pursuit of wealth too often crowds out other pleasures and priorities because when it comes to money, it’s relatively easy to tell how you're doing—if the numbers are going up, you're thriving, right? Not necessarily. Studies suggest that people who consider making money a significant life goal score lower on measures of mental health, possibly because by spending an inordinate amount of time focused on acquiring wealth or possessions, they get distracted from more fulfilling experiences such as nurturing close relationships.
Wouldn't it make more sense to figure out other ways of measuring success? For instance, if you value spending time with someone you love, try jotting down ideas for how to make that happen—dinner twice a week, two long vacations a year—and pursue those goals instead. The same goes for success on the job. Instead of gauging your progress by the size of your paycheck, list all the other ways your work is satisfying, whether it’s the creative freedom you were given on your last project or the close bonds you share with your colleagues.
Finally, if the stuff of your dreams is just that—stuff—log off of eBay and ponder the bigger picture. Are you shopping to fill an emotional need? People who are money-hungry are often chasing something deeper. On the other hand, if luxuries are truly important to you, you'd better find a career that will bankroll them or you'll end up feeling frustrated—or wallowing in debt. It’s perfectly OK to enjoy the finer things in life. But if you change your lifestyle to reflect your deepest beliefs, you may discover a kind of happiness that isn’t found in a handbag, no matter what the brand.
Published in Self Magazine
