Lazarus Long, a character in one of my favorite books, has among his many excellent lines: Budget the luxuries first.
Just remember, luxuries aren’t necessarily the sports car, the big TV, or the new pool. Luxuries might be an evening spent with a loved one, an hour curled up with a good book, or that new album you’ve been wanting. Wealth isn’t everything, and too many people forget this. We all know people who are wealthy but live miserable, unhappy lives, and people at the opposite end of the spectrum who are quite satisfied with and enjoying their lives.
Being rich does not make people happy and we all know it. That is the long and short of it – shown time and again throughout history, and even in maxims people use every day. “You can’t buy love.” “Money never made a man happy yet.” And my personal favorite: “If you want to feel rich, count the things you have that money cannot buy.” Luxuries, like beauty, are in the eye of the beholder, and some of the happiest people I know spend little on their luxuries. It isn’t cash that makes you happy. So why do people strive for money so much? If it can’t buy happiness, why pursue it?
Due in part to the economic climate the United States is currently facing, it seems like more and more people are miserable. Jobs are dwindling. Retirement funds have been wiped out. Homes are being foreclosed on. It would be easy to underestimate the difficulties so many people are facing – hunger, poverty, unemployment, and homelessness, just to name a few. Even people who are still currently doing alright, have their home, their job, and their families must worry about the future. All of this is tied to money; I won’t go into the politics and policy of it, but we all know that to be true.
However, there is another face to the story. One thing I have consistently seen is that the best things in life – the things that make people truly happy – aren’t things. Yes, many people go out for some ‘shopping therapy’ when they feel down, but buying a new sports car or that big-screen TV you have always wanted generally only gives a short-term and temporary boost in happiness. And, in an interesting twist, in many cases remembering purchasing something has actually been shown to cause a small decrease in your good mood.
Now take a look back into your memory. What are the times you were happiest? I would be willing to bet that almost all of you are recalling some time you spent with other people, having experiences. How do you feel right now, remembering that time? Memories have been shown to create happiness and better moods. Remember this! Dollar for dollar, spending money on a vacation with your family or friends is going to bring greater happiness than splurging on a new car, or TV, or that video game console. Experiences have lasting value, and you get to tell stories and relive them again and again.
Even better, experiences don’t have a set price tag. Believe it or not, some of the best experiences can be had for dirt cheap, and apparently there is little correlation between the expense thereof and the degree of happiness obtained. Family picnics, geocaching, or backpacking through the countryside are all inexpensive ways to create great memories.
This being said, there is the unfortunate opposition factor. While having money does not inherently bring happiness, not having money can lead to stress, frustration, and depression. Seemingly simple things can have devastating effects. Missing a mortgage payment can (and has) drive a family apart. It is important to remember this.
A famous psychologist named Maslow proposed in 1943 that people’s needs are broken into five distinct tiers, the “Hierarchy of Needs.” The full implications of this are wide-reaching, but it can be applied to this seeming incongruity. Obviously, people who do not have enough money to meet the two basic tiers will be less happy – this is most often seen in poor countries where a few dollars can mean eating or not, or having shelter or clean water. In more successful areas, though, the top two tiers can just as easily lead to unhappiness; people become envious or jealous of those that have more than them.
Maslow's Hierarchy of Needs
(graphic: J. Finklestein http://en.wikipedia.org/wiki/File:Maslow%27s_hierarchy_of_needs.svg)
All of these are things to keep in mind when considering your financial health and how it relates to happiness. These, of course, are some extreme examples, but they serve to drive a point home. If you need something financially, rather than making yourself unhappy to do it, remember to be happy with what you have while you work towards it. Being happy makes you healthier, and being healthier can make you happy – a wonderful cyclical effect of which we should all take advantage.
Tags: Budgeting, experiences, finances, happiness, health, life, luxuries, money, Retirement, savings
