"You Don't Have To Be Rich" by Jean Chatzky 

"Comfort, Happiness and Financial Security on your Own Terms."

Money has never made a man happy yet, nor will it.  The more a man has, the more he wants.  Ben Franklin

When what we are is what we want to be, that's happiness.  Malcolm S. Forbes

Happiness is our reaction to an experience.  That reaction is temporary.

Buy This Book  I highly recommend it.

=============================================

Additional thought of Graham White in highlights.

THE TEN COMMANDMENTS OF FINANCIAL HAPPINESS

Your happiness doesn't hinge on how much you make, your happiness depends on how you handle it!

1.  Get Organized.  

People who say they are "pretty well organized and can find what they need quickly" are happier than those who aren't and those who can't.  They're not stymied on a regular basis by frustrating losses-losses of objects, and losses of hours of their time looking for those objects.  They're not consumed by administration.  They can focus on the good stuff.

2.  Pay Bills as They Come in Rather Than all at Once.

People who pay their bills as they come in rather than stockpiling them to do once a month are happier.  Sitting down to pay the dozen or so bills all at once is pure drudgery.  It eats up a chunk of time that you'd rather spend doing just about anything else.  Moreover, watching that large sum of money fly out of your hands can be an emotional drain.  Do it in bits an pieces, however, and it's far less overwhelming in terms of time-and your bottom line.

3.  Keep Track of Your Spending

If you don't know where your money goes you're more likely to be unhappy.  Save your receipts or don't leave home with plastic and more than $20-$40 in your pocket and try to live within those limits.  

4.  Save at Least 5% of Your Household Income

People who manage to save are happier.  Have it automatically deducted before you can spend it.  Up your contribution to 6%, then 7%, then 8%, until you reach the level that will enable you to put away enough to fund your future (aim for 20% or better).

5.  Protect Your Family (and yourself)

Purchase life insurance, disability insurance and have a current will.

6.  Minimize Credit Card Debt

Start by paying down the ones with the highest interest rate as quickly as you can.  Do without every extra you can, in the long run you will be able to afford so much more.

7.  Donate Your Time, Expertise, or Money

It will make you happy, I promise.

8.  Live Within Your Means

Don't buy all the little extras.  Eat at home and pack a lunch.  Skip the snacks or pack them with you.  Wait.....wait.....wait to spend and you'll have ten times as much to work with down the road.  It's worth it, trust me.

Don't be consumed by the desire for more.  It will never make you happy and will likely make you broke.

9.  Develop Goals and Begin Working Towards Them.

The best way to develop financial habits is to set some goals that you're working towards.  The more defined your goals are, the more motivated you will be to reach them.

10.  Communicate About Finances With Your Partner

Make sure you're making financial decisions together.  Divorce is the most expensive thing you will ever do, so don't let money issues be the cause of it.

Family #1

Makes less that $50,000 in their household, but are in control of their money.  They have adopted the following habits:

• They have some sort of filing system in place.

• They pay their bills as they come in rather than once a month.

• They don't spend more than they can afford (they don't carry a credit card balance from month to month).

• They do not often buy things they don't need.

• They know where their money goes and don't nickle and dime themselves broke on little things.

Family #2

Earns at least $75,000 a year but they're not in control of their finances.  They have at lease a few of the following habits:

• Their financial records and paperwork are disorganized, so they have to scramble to find what they're looking for.

• They pay all their bills once a month rather than as they come in.

• The spend more than they can afford so they have to carry a credit card balance.

• They often buy non-necessity items.

• They don't know where there money is gone and nickle and dime themselves on lots of little purchases.

Both families are equally happy.  The difference is that the first family would require a 50% pay raise to achieve the same income.  $25,000 per year is how much it costs to have just two of the habits from family two.

If you would like to know how to earn as much as Family #2 and be as responsible as Family #1, keep reading.

=====================================================

Even when it's working in your favor, money can't make you happy.  But it can - if you're handling it wrong - make you miserable.  Money, it turns out, is the biggest contributing factor to a person's unhappiness.

What the happiest people have in common when it comes to their money is they have distinctly different habits and behaviors about things you might consider minor, such as how often you pay your bills and what you do with your bank statement when it arrives in the mail.

It's not about how much you have that determines financial satisfaction, it's how you treat it.  If you make $50,000/year in your household, but have poor money management habits, developing good habits will increase your level of happiness the equivalent of a $25,000 raise in pay!  That's the equivalent of a 50% raise!  This book will help you spend smartly, eliminate your debts, and set and reach your financial goals.

Once you've achieved life's basic comforts and necessities, more money doesn't necessarily buy more happiness.  We make poor choices about how to spend that extra $100 or $1,000 and we spend $5 here and $10 there rather than do something significant or meaningful with it.  But happiness is a product of things that can't be bought.  It's how you're getting along with your children.  It's the pat on the back you get on the job.

The average happiness of people in the US hasn't grown over the years, despite the fact that the cumulative wealth has shot up since WW II.  The same is true for Great Britain.  In fact, there's very little relationship between income and happiness among most of the world's well-off countries.

Where Money Fits into the Picture

There is a genetic component to your happiness.  It accounts for about 25 - 40% of your overall well-being.  Your genetic predisposition toward happiness is a little like your cholesterol level.  It can be influenced by good habits and bad habits, as well as by medication.  But part of it is simply your chemical makeup.

Marriage or another significant personal relationship accounts for about the biggest chunk of your overall happiness.  People who are married are more likely to be very happy than those who are single, divorced, or widowed.  Those who are living with another person or in a serious long-term relationship get almost all of the beneficial effects.  Why is this the case?  Married people not only enjoy continued company, but also stay in better physical and mental condition, arguably because they take care of one another.  They're also happier with their financial situation than singles, perhaps because they have on another's income (or ability to earn an income) to fall back on.

Job satisfaction.  People who are working are happier than people who are not working.  Staying home to raise your kids, if you're doing it by choice, qualifies as a job.  Women not out in the workforce in the 18-45 age group, which these days qualifies as the child-bearing years, have happiness scores nearly as high as those of women in the workforce.  They feel just as useful, confident, and content.  

Retired people are an interesting mix.  They tend to be happier than working people as long as they can maintain their standard of living.

Money makes people a little happier because they can afford more of life's basic comforts as well as a few extras.  But, despite what you may think, they are not that much happier.

Chances are you know people who make $100,000 a year who are miserable, just as you may know people who earn $25,000 who are perfectly content.  

Those earning less than $25,000 are not as happy as those who earn $75,000+, but after $75,000 happiness does not increase with earnings.  In addition, people who earn around $50,000 a year are just as happy with their friendships, standard of living, marriage, children and appearance as those who earn more than $100,000 a year.

Income contributes to your happiness to the extent that it makes you comfortable.  Once you've achieved those basic comforts, your happiness has to come from another place.

Money problems can make you very unhappy.  Money can't buy you happiness, but it can rob you of it.  More people say they have less control over their finances than any other item, including weight, health and children.  The lack of money and the mismanagement of money is the number one cause of relationship arguments and divorce.  Financial woes trigger health problems, depression, alcoholism and addiction to drugs and gambling.  

25% of those making more than $50,000 say they feel little or no control over their finances.  If you're feeling out of control about money, chances are you also feel inadequate as an investor and money manager.  When you feel stressed because of finances, you're more likely to do something that isn't good for you, like eating junk food, smoking, drinking or doing drugs.

If you can get on top of your finances, you'll be happier in general and with the other aspects of your life as well.  Your health tends to improve, you'll find a job faster if you lose one and you're more likely to get married and stay married.  You are likely to feel less worried and more useful, content and confident.  Seizing control over your finances is a stepping stone to gaining control over your life and achieving happiness.  People who are financially happy are more likely to be successful financially.  You don't have to be rich, but you may end up richer anyway, in more way than one.

 

How is it that while money is responsible for only a relatively small piece of overall happiness, it can rob you of happiness so completely?  Two reasons.

1.  All areas of happiness are highly interrelated and money, when it's working against you, can stop you from achieving a feeling of well-being in any of the other areas.  Fighting about money drains the joy from your marriage.  Forgoing medical treatments because of money problems affects your health.  If you feel you're working too hard for the money you earn, it affects your job happiness.  

2.  Probably the more important reason is that despite the fact that income can produce only a small piece of happiness, most of us believe it has the power to do much more.  We have a deep-seated fundamental belief that money represents happiness.  We chase it like there's no tomorrow and as we do that, we lose time we could spend having a leisurely dinner or taking a long walk with the love of our life. 

We lose time we could spend in healthy activities we enjoy or cooking at home and drive through a fast-food window.  We lose time we could spend taking courses and seminars that would lead to a career we'd truly enjoy because we're so focused on getting out there and putting in more hours to have more hours we're paid for.  In other words, when we chase money, we lose the opportunity to focus on the relationships, health, and work satisfaction that could reward us with a huge upward swing in happiness.

Stop chasing money and put it back into proper perspective.  Happiness is the process of enjoying what you're doing: your relationships; your job; your free time; your life (Ed Diner, professor of psychology at the University of Illinois).  Wealth is like health, the total absence of it can make you miserable, but having it is no guarantee of bliss.

 

Enough IS Enough

If you think back to high school, you will remember that some of your graduating class went on to secondary education to boost their earning power, and for others high school was the end of the road.  Higher earning college grads start adult life on a slightly happier rung, but ultimately, the happiness level of both plateaus and stays about the same.

Why?  It doesn't take a heck of a lot of income to buy happiness.  Those with higher income expectations ALSO have higher lifestyle expectations!  They expect to earn more, live in a larger home, see more of the world and drive a nicer vehicle.  It's only a short matter of time before any increase in income is absorbed by increase in lifestyle.  A few months later, you can no longer remember how you possibly lived on less, which brings you right back to the same level of happiness you started with.

Materialism is placing a higher value on material possessions and income than you do on your personal relationships, your free time, and you health.  People who want this way - who overwant - tend to believe that money equals happiness.  Research shows that they are the very same people for whom money gets in the way of ever achieving the happiness they seek.  Nearly one-third of Americans do, maybe even you, and they're substantially less happy as a result.  People who believe money can by their happiness are less satisfied with their self-esteem, their friendships, and their life overall.  Half feel they don't measure up financially to others their age.

Who are these overwanters, these people who believe money equals happiness?  Almost everyone who believes that money represents happiness also think it represents independence, security, comfort and enjoyment.  Many feel it represents control, achievement and power.  They are also more likely to say it's important to own new cars, wear stylish clothes, have the latest gadgets and be good-looking.  (I would characterize these qualities by describing these individuals as shallow.)

The irony is that the financial habits of people who believe money equals happiness stand in the way of achieving that happiness.  Believers are less likely to balance their checkbooks, les likely to remember to pay their bills on time, and more likely to say their finances are disorganized.  They are more spontaneous with their spending.  They are more likely to enjoy splurging.  The end result is people who believe money equals happiness are no likelier to have a higher income or net worth than nonbelievers.

WHY WE WANT

Half of us thought we'd be doing better financially than we are today.  Nearly as many are frustrated with the amount of money they have compared with their peers.  If you're among the people for whom having some money only makes you yearn for more, frustration may be inevitable.  Why?  Because no amount will ever be enough.  You need to adjust your values.

We live in a culture that bombards us with messages about things that will make us better people if we're able to own them.  As a result, many people are never satisfied.  (I would describe these people as suckers.  They believe what they're told by someone else instead of thinking for themselves.)

People who view money as happiness are more likely to shop when stressed.  They think money can buy them relief from tension and a better mood.  They believe they are buying status, that value and worth is something you can buy.  When you buy the latest cell phone, the latest vehicle, upgrade into a better neighborhood, you're trying to better your position in life through shopping.  

Andrew Oswald, an economist at the University of Warwick in England, believes that 80 percent of all spending is an attempt to buy STATUS!  The goal is not to purchase something that actually makes your life better or easier, but something that makes you feel superior to friends, neighbors, relatives, or colleagues - and that simultaneously makes them pale in comparison.

The curse of being human is that we must keep looking over our shoulders before we can decide how we feel.  We can't know how we're doing until we know how others around us are doing.  If we pale in comparison, we tend to feel inferior.  The wider the gap, the bigger the blow to our ego.

For decades we have taken "keeping up with the Joneses" literally.  By the 1990's, however, maintaining the status quo was no longer good enough.  Instead, we had to outdo our neighbors.  To make matter worse, we are now comparing ourselves not just to our neighbors and peers, but also to celebrities!  Studies have shown that the apparent average income of people on fictional television is WAY above the median income of the average family.  When you measure yourself against these celebrities who have personal trainers, chefs and maids on their payrolls, who spend hours making sure their client looks good because it's their job, guess how you feel in comparison?  (Besides, do you think they pay retails for the things they buy?)

Wanting more than you can afford will rob you of happiness and contentment.  Wanting things doesn't lead to a happier life, it leads to more wanting.  You'll be better served if you escape your materialistic urges in your earlier years.  

RECIPE FOR SATISFACTION:  Three Kids, No Student Loans

Happiness is not found in bigger, better, newer and more expensive possessions, it is found in the relationships in our lives.  Being tied down to debt and a high maintenance lifestyle robs you of the freedom to pursue the things with true value.  For the average family, this is achieved by minimizing expenses, taking the time to find a good deal, balancing their checkbook and focusing on the quality of their time together rather than the expense of the activity.

• Money doesn't make us happy.  

• Possessions don't make us happy.  

• Relationships are better than money.

• Family is better than money.

• Education is better than money.

• Exercise and a good diet are better than money.

• Even with only a little money you can have all of those things.

HAPPINESS HAPPENS

Purchases that you experience (vacations or theatre events, for example) bring more happiness than things.  We assume that things - belongings - will make us happier because we'll have them longer.  Nope.

LEARNING TO WANT LESS

• Relationships are better than money.

• Family is better than money.

• Good health is better than money.

It is the intangible things that are better than money, but the more stuff we have, the more we want.  If we start with less, we set our goals lower.  If we start with more, we set our goals higher.  It doesn't matter where we start, it is human to always want MORE.

• Remember the difference between a WANT and a NEED.

• Compare down, not up (look at those who have less than you).

• Monitor your reaction to things.  Take note of how long the feeling lasts.  You may decide it's not worth it to spend time away from those you love to earn money to buy things.

The more control you have over your finances, the less money stresses you out.  Why is control an issue?  Because it costs you.  It costs you time.  It costs you money and it costs you mental energy.  

ORGANIZATION

How you use time determines money management success and getting organized is the key.  Look at the following statistics and the difference between those who are organized and those who are disorganized:

ORGANIZED	DISORGANIZED
72% feel financially secure	23% feel financially secure
56% worry about finances	86% worry about finances
24% are knowledgeable investors	7% are knowledgeable investors
61% are good money managers	28% are good money managers
73% are in control of their finances	42% are in control of their finances

Organizational ability is achieved through personality type, modeling by the individual's parents, and through education and discipline on the part of the individual.  It is a much easier skill for some than for others, but necessary for everyone who wishes to be successful.  For those who feel guilty because of their lack of organization, you first need to be aware that it is not your "fault" but your challenge.  To overcome this challenge, you need to begin focusing on one small detail at a time, mastering each detail until it is a habit.  You should also GET HELP and develop as many simple systems as possible.  Delegate all organizational activities as possible so that you can focus on a few and be successful.

The first steps in getting financially organized are to balance your chequebook (or better yet, use only cash, prepaid credit cards that don't allow you to go INTO debt, or your debit card) and pay your bills as they come in rather than once a month.  Of course, some sort of filing system never hurts.  You will likely also find it easier to have your bills paid by automatic withdrawl.

People who pay their bills as they come in:

• Are much more in control of their financial situation.  

• Have less credit debt and more savings and investments.

• Have a cash reserve to weather a financial hardship AND save adequately for retirement.  

• They are not surprised by the amount they've put on their credit cards.

• Are more likely to have planned for the future by writing a will and buying life insurance.

• They are more satisfied with the money they have.

• They feel they have enough to buy what they need, AND what they want.

• They're less likely to feel frustrated that they're not keeping up with their friends and neighbors.

All of this is true despite the fact that people who pay their bills as they come in DO NOT have more money than those who pay bills once a month.  It's because they've taken control.  (They're living WITH INTENTION)  

Because you can replicate this behaviour, you can also replicate the feeling of control, satisfaction and well-being.  The more control you have, the less money you need to live and be content.

 

CONQUERING CLUTTER

People are fundamentally afraid of change.  What they need is permission to make changes.

Step One: Toss

Tossing isn't synonymous with putting something in the garbage.  If it has value, donate it or have a yard sale.  Don't let guild persuade you to keep certain items.  Your home is where you live.  It should nurture you.  You should love walking through the door - not dread it.  So if you hate the sad-eyed clown Great Aunt Ethel made in ceramics class, it goes.  Giving yourself permission to toss junk mail (sales flyers, catalogs, etc.) unopened can be a huge time saver as well.  (Note: Credit Card solicitations can be tossed unopened, too.  But it's best to shred them to protect yourself from so-called dumpster divers-identity thieves who might pull them out of your garbage.)

For some people, tossing seems wasteful, and that makes it more difficult to do.  If you're among them, start small.  So a shelf at a time, asking yourself about each item, "Do I love it?  Did I order it?  How does it make me feel?"  If it's a book (not a potentially valuable first edition), will I or anyone in my family ever crack it open again?  If the answer is no, your mission is clear.  

Step Two: Organize

Do this with someone else if you feel overwhelmed.  Schedule a time every week that you do this together.  The support makes a big difference.  As your papers come in, they should go in one large pile (much better than two or three small piles because no pile goes forgotten or untouched).  Organizing is a matter of separating the items in that one big pile into their proper categories.

You want to give your categories the same names you use in everyday conversation - the names that are on the tip of your tongue.

Some people like to use paper planners, others like to have their information kept digitally.  Find what works best for you and then continue using that system.

 

WHAT DO YOU REALLY WANT?

Goal setters are happier with their finances and less likely to worry about their money.  Likewise, financially happy people are more knowledgeable about the amount they need to save in order to reach their goals, and are more likely to be on track to do so.

People are funny where time is concerned.  We often overestimate how much we can accomplish in a single day, yet we generally underestimate how much we can accomplish in a year if we make just a little progress every day.

Recognize the obstacles in your way

Design your life in a way that you are able to stay as far away from temptations as possible.  Surround yourself with healthy examples - good money managers, sound eaters, avid exercisers, or other people who embody the characteristics you desire.

Build better habits

No matter what your goals are, you've got to make the life changes necessary to reach them.  The same you pursue physical fitness by beginning to change your habits is the same you must pursue financial fitness.  

Stop eating out and save $50 a week, $2500 a year.  If you don't put anything into retirement savings right now, this alone can make a huge difference.  Ten years from now you'll have $67, 000, in twenty years you'll have $200,000 and in thirty years you'll have $525,000!  (Based on 8% return)  That's HALF A MILLION DOLLARS because you stopped going out for one meal a week!  THAT'S how you begin to process a goal.

It's important to replace your old bad habits with new and improved ones.  It will be hardest to tell your friends who are asking you out, "No," the first time, but it will get easier.  Eventually they will stop asking and you can still spend time with them by having them over to your place for dinner you've made, potluck or oven ready meals that are easy to prepare.

Automate where you can

You can automate your bill payments as well as your investments.  If the money is taken out the same day as you have your pay cheque deposited you don't have the money to spend.  You'll find that eventually you don't even miss that extra money because you have adjusted your lifestyle and consumer spending.

Focus on the future

Dwell on your success.  If you fall back into old habits for a day-don't consider it an excuse to stop trying.  Simply start again tomorrow.  After all, reaching your ten-year milestone eleven years from now is much better than never reaching it at all.

Maybe you had a bad month financially.  The first three weeks you weren't able to save at all because you had to fly home to see your sick grandmother and your dog needed to see the vet.  But by the fourth week you'd regrouped.  You were able to put way $50.  It wasn't the $200 you'd hoped for, but it was something.  Try to focus on the accomplishment of that.

Do you know what you really want?

One reason we may be unable to set goals - at least in the current economic environment- is that it's just too unhappy a subject.  For the same reason that some people avoid depressing movies and others can't get near a scale, one-third of people say they try not to think about how much they'll have to live on during retirement because it's just too depressing.  Women feel this way more than men, as do those whose education ended with high school.  Four out of ten people who earn less than $50,000 per household a year eel it's a subject they can't bear.  But it's not a problem that vanishes with higher income-two out of ten individuals who earn more than $50,000 per household still say the thought of their retirement income gets them down.

People who believe in watching their pennies are less likely to worry about their finances and more likely to feel at least somewhat financially secure.  They tend to be able to afford to pay off their credit cards each month, and have more money to buy the things they want, have a good time, and weather a financial hardship.  And they're significantly closer to reaching their financial goals.

You may be saving for a particular goal, but you likely have no idea how much you need to save or invest in order to get there.  Half of those saving for retirement and college say they aren't likely to hit their marks or don't know whether they will or not.  Saving blindly toward a financial goal causes stress.  It's like hopping in the car to drive to a destination "somewhere out there," but not knowing how long you're going to have to travel or whether or not you have enough gas to get there.

Pages 95-97 need to be put online as a tool.

 

MAKING IT HAPPEN

Greater than 25% of those with a company retirement savings plan don't participate.  You need to invest as much as possible as early as possible because of the power of compound interest.  (When Albert Einstein was asked what the most amazing formula was, he replied, "The formula for compound interest.")

(Only one mutual fund manager has beaten the market the past twelve years running.  "Expert" advice are just "expert guesses".)

The reason you want to be diversified in you holdings is that nothing is ever guaranteed.  Never have more invested in any one area than you can afford to lose.  Put all your eggs in one basket and if that basket is part of the market that is low when it comes time for you to retire, you're going to have to keep working.  This means you need to educate yourself when it comes to investments, not just the stock market, but also investment property, business investments, art, antiques, precious gems etc.  Master one area and then move on to studying the next.  Investing only in the stock market is like graduating High School.  It helps with some things, but a PhD is worth so much more.  More PhDs are better than one, so keep up your ongoing financial education.  Never stop learning, that's how you become truly successful.  

 

LIVING WITHIN YOUR MEANS

Living beyond your means begins with a Pattern of Unconscious Consumption.  

Why bother to become a better save?  Because boosting your saving prowess can have a huge emotional payoff.  Nine out of ten savers say they're "happy" with their lives.  Savers are more likely than spenders to be happy with their lifestyle, self-esteem, even their weight and appearance.  They're more likely to feel confident and content, less likely to feel stressed and restless. Spenders are just the opposite: They're more likely to be frustrated with their lot in life.

• 40% save nothing.

• 30% save less than 5% of household income

• 25% save between 5-10%

• 5% are able to put away more than 20%

It's impossible to live within your means if you don't know how much you have coming in each month and how much of that is already committed to covering you fixed expenses.  The number one mistake of spenders is to live a lifestyle that matches their gross salary rather than their net salary.  You're not really making $50,000/year, you are making $38,500.  Disposable income is what is left after all bills are paid and the investments are made.  

60% of respondents said if a paycheck were late, they'd have to cut back on at least one important expense-the rent, groceries, utility bills. That's how a downward spiral starts. (And digging yourself out of the hole this spiral creates is the HARDEST thing to do financially.  Delay the gratification you receive from Unconscious Consumption, save a little first and don't go into debt and life will be MUCH more enjoyable).

You need to spend time researching major purchases.  Don't just go out and buy something in a day, take the time to find out what good quality is, what a good deal is and live your life in a way that you can wait for those good deals to appear.

Financial Balance Indicators (Are you living within your means?)

• You make your mortgage or rent payment on time each month.

• You purchase the things you need.

• You have money left over (not using credit) to have fun.

• You have money (not credit) to purchase what you want.

• You completely pay off your credit cards every month.

• You could weather a financial hardship like losing a job.

• You save the amount you would like for retirement.

• You save the amount you want for your children's education.

 

Living a Financially Responsible Lifestyle

The financially responsible put off making purchases until they have the cash to pay for them and are less likely to spend on things like meals out, entertainment, CD's etc.  They save money simply because they don't see a reason to spend it.  For example, they're more likely to cook at home than eat out, to buy clothes on sale rather than pay full price, to use coupons, wash their own cars, and mow their own lawns.  

Adopting these habits seems to pay off.  People who follow budgets and track their spending are more likely to be steadily working toward their financial goals.  They're also more likely to be very happy with their overall lives, and that happiness doesn't seem to hinge on getting a shopping fix.  The Financially Responsible are less likely than spenders to shop to cope with stress.  Similarly, they're less likely to say that splurging makes them feel good.

Once you begin to master delayed gratification, there is an incredible sense of power and freedom.

 

Getting Out Of The Rat Race

Competitiveness is the hallmark of the baby boomer generation.  Boomers were raised to believe you sink or swim at work and there's little in between.  Many boomers spend every day of their working life trying to prove they're more worthy of that raise, that promotion, that corner office than the next guy.  And once they get these rewards, they don't hesitate to show them off.  It was a baby boomer who coined the phrase, "He who dies with the most toys wins."

For Gen Xers, experiences are better than stuff.  To them, he who dies having done the most wins.  And because of that, a job and a paycheck simply open the door to life options.  The trade-off is having a career path may not be particularly straight-or even vertical.

Generation X and Y's can be summed up in their guiding statement, "Whatever."  They understand the world is volatile, but they believe it's their ability to customize themselves, their lives, and their experiences that's going to lead to their happiness and their affluence.  The Ys believe the future is theirs to do as they please, as the person they choose to become.

Harvard economist Juliet Schor has described this generation of working Americans as being tapped in the cycle of "work and spend."  You work hard to buy the things you want.  Buying more makes you want more, so you work harder still.  Then you buy more.  Then you want more.  And eventually, you feel you can't escape.  This cycle is at least partly responsible for the fact that the number of hours we put in at the office have risen 10% over the past twenty-five years.  Put another way, this means that each year you're putting in a month more at the office than your parents did.

And that's just the office, not taking into account cell phones, fax machines, e-mail, Blackberries, etc. that are eating into our time even when we're not at the office.  Our parents left work at work, we bring it home.  As absurd as it sounds, men are actually happier if they're asked to put in some hours on a Saturday.  Why?  It makes them feel needed.

How Do You Feel About Your Work?

Nothing weighs as heavily as how you feel about the actual work you're doing.  Is it meaningful?  Is it important?  Does it draw you in and make you feel useful?  So many people jump into the Rat Race only to find that they aren't happy with their fast paced, high-consumption lifestyle.  By pulling back and consuming less, even though they are making less money, they are happier.

Going With The Flow

Flow is when you're so caught up in what you're doing that you stop watching the clock.  You're not overwhelmed.  You're absorbed and time flies by.

80% of seniors say they're working well into "retirement."  This turns out to be a positive.  Why?  Because those who are working full-time are significantly more likely to be happy with their lives than those who are retired or not currently working.  (As someone who believes she won't ever want to really retire, that makes sense to me.  Busyness breeds contentment.)  Working people feel more in control of their financial situation and more financially secure as well.

The type of work you're in isn't what's important, it's the fact that you enjoy it.  So, you can make less money doing what you love and be happier than making more money doing something you're doing for the money.  How much more does it take to buy the same level of happiness?  $25,000/year.

38% of people say they're happy with their jobs and they are four times more likely to be very happy with their lives.  When you break down the factors contributing to overall happiness, job weighs in high on the list, right after marriage and self-esteem, but before health, finances, children, friendships, and appearance.  Being happy with your job also makes you more likely to feel useful, confident, and content, and less likely to feel stressed, restless, and hopeless.  Clearly, it makes sense to find an occupation that satisfies your soul as well as your wallet.

Although the majority will deny placing their job ahead of family, friends and exercise, it's important to note that those who do admit to this behavior are significantly less satisfied with their lives.  Why, then, do they do it?  They feel that working harder will result in more money in the bank, and more money in the bank is what they feel they need to achieve happiness overall.  It's a cycle.  A vicious one.  And it doesn't work.

Those who way they're happy because they're successful rather than successful because they are happy are also more likely to place their jobs before their family and their health, a negative attitude, as noted above.  1/3 of men (1/5 of women) who say their happiness is dependent on their success are less likely to be happy than people who say the reverse.  They're more likely to worry about their self-esteem and their jobs.  Those who say they're successful because they're happy are happier overall, happier with their lifestyle, marriage, and financial situation than those who thing their success makes them happy.

There's little difference in the effects of giving money, time, or stuff - the act of giving resonates in a positive way.  Why?  Because giving makes you a happier person.  People who make frequent donations or who volunteer are happier overall than those who don't.  They're more confident and more content.  They're also happier with most aspects of their lives, their friendships, marriage, children, lifestyle, finances, and self-esteem.

 

FINDING WORK THAT FITS

There are three different ways to look at work.  There's work for hire, otherwise know as a job.  If they didn't pay you to shop up, you'd quit.  There's a career.  That's when you're on a track and you feel a personal drive to move from point a to point b, to accomplish some of your goals.  And there's a passion.  That's something you'd do even if you weren't getting paid.

Getting paid for their passion is, for many people, the ultimate goal.  For others, who have come to terms with the fact that no one is going to pay them to write poetry (or whatever), the goal is finding a job that pays a living wage but leaves enough free time to pursue their passion.  The career-the middle road-is where most of us end up.

While it may be easiest to find a skillful challenge that takes you into the flow on the job, it's certainly not the only place you can do it.  The key, when you're unemployed, is finding other activities that induce flow.  They need to present a mental challenge and fulfill a need-for your family, for a charitable organization, for your future goals.  In other words, you have to feel that you're doing something useful.  You could volunteer, apprentice, run a half-marathon or a 10K, or take a couple of classes.  You could embark on a challenge to save your family almost as much as you're not bringing in, by refinancing your mortgage and your car loan and restructuring your other debt.

The following is a list of characteristics that, when applied to just about any job or occupation, result in more happiness rather than less.  (And note: Making a lot of money isn't one of them.)  Perhaps over the course of your life and career, you can remember a time when you achieved some of these things.  That's a good place to start.

• Job security.  We feel better, more comfortable, more competent, and better able to make decisions if we're not worried about being pink-slipped on a regular basis.

• High relative income.  That's not the same as high income, but earning at least as much as colleagues and coworkers improves your satisfaction.

• Interaction with other people.  A tight-knit sense of community makes a job feel more like a family.  For that reason, small workplaces tend to be preferable to large, impersonal ones.

• A challenge that requires use of your skills.  Busy work won't do.  Only when we are forced to focus our attention and concentrate in a way that takes us out of our everyday existence do we come close to flow.

• Clear and well-defined goals.  For many of the same reasons that having financial goals make for a happier life, having work goals does as well.  It's comforting to know that you have marks to meet, that your challenge is achievable, and that you're approaching the finish line.  Feedback along the way plays an important role as well.

• Autonomy.  Self-employed people tend to be happier because they're able to make their own decisions without being challenged.  But you get the same benefits by being a supervisor in a corporate environment or by being able to work independently.  Being in control of the speed at which you work-being able to meet your deadlines in your own way-is key.  A supervisor dictating your every more stifles satisfaction.  If you do have to agree to timetable, better a colleague's than a boss's, and better a customer's than a colleagues.

• Small freedoms.  The ability to work from home from time to time is a very nice perk but even smaller liberties, such as being able to move your desk in your office or add a chair or couch that reflects your personality, enhance feelings of satisfaction.  And having a short commute is a plus.

• Variety.  We are happier at work if every day isn't the same in terms of where we work (a little travel is a good thing), what we do, and which skills we draw on.

• Using the skills you've spent time acquiring.  It's important to be valued for the particular skills you bring to work-and to be able to use those skills-rather than just being a warm body at a desk.

• Status.  How does society view your job?  Is it a position of respect?  If so, that's a plus.  And note: This has very little to do with how much you earn.  College professors have a great deal of respect.  Sanitation engineers may earn just as much, but they don't have adoring students hanging on their every word.

 

MONEY RICH TIME POOR

Most people want more time to spend with their families doing something other than work.  More than half of us want much more time.  Their high consumption lifestyle has made them too busy.  They have plenty of money to spend, and spend it they do, but very little time.

Wholesale changes don't work unless you are truly disenchanted with the life you have now.  Choosing to work less means one must begin to compromise.  Deciding to live on less means not purchasing the brand new leather upholstered vehicle, the 3,000-square-foot house, two-week vacations overseas and a private school for your children.  You have to make hard choices about which of those you really, really care about and which are peripheral.  

Activities, not things bring us the greatest happiness.  A study found that the second highest ranking activity that creates happiness is volunteering (first ranked was dancing).  There are three ways to approach volunteering.  You can offer up your skills, you can use the opportunity to develop new skills or you can use it to take a break from your daily life by doing something completely different.  

Knowing what you're looking for out of the experience is important.  Indoors, outdoors, with kids, to teach your kids or to escape from them may all be considerations.

Don't overdo it.  3.6 hours a week is the average.  Don't make commitments you can't fulfill.

The Silver Lining

As people's priorities change, they spend less time at work and more time with family and other things that they love.  The result is that they become happier people.  As they become happier, they become more productive at work and then...they get promoted!

Not only do people who are happier in their work have slightly more money, more money comes to people who are happier in their work.  If you think about it, it makes sense that it would.  If you're a happier person, you have better relationships with your colleagues and superiors, and you enjoy what you're doing more.  Therefore, you're likely to do better work.  And when raise and bonus time rolls around, you're likely to reap the rewards.  

 

REAL LIFE RESPONSIBILITIES

• 57% of adults don't have a will.

• 62% don't believe they have enough money for a crisis.

• 43% of those earning six-figures say they have cash on hand to deal with a layoff.

• Nine out of ten women will have to look after their own finances at some point.

To figure out how much insurance you really need to buy, you need to use pencil and paper or one of the many worksheets available on the Web and run the numbers for your particular situation.  You need to know how many years of support you want to raise with the insurance payout and what big-ticket items (like the mortgage or college) you'd want to be covered.  You also need to know if it is a short-term measure until your spouse/family can support themselves, or whether it will become the income-generating annuity they live on.

Disability insurance is a necessity, it is particularly important for singles.

 

MONEY AND RELATIONSHIPS

By spending more than your spouse prefers, lending money that your spouse would rather you didn't, buying something without telling your significant other, even investing in instruments your spouse isn't comfortable with, what you're really saying is that you're not on the same page about what you want for your lives.  And you're doing it in a very passive aggressive way.  Is it any wonder money creates such a big problem in a marriage?

 

Money and Your Kids

Only 60% of families talked to their kids about finances, more to the boys than the girls.  At least this is on the rise.  2/3 of those whose parents talked with them were good money managers while only half of those who didn't claimed the same thing.  The same is true for knowledgeable investors.  More people who say they're better savers than spenders learned about money at home as well.

85% of graduates have received no financial education at school and what little education there is seems to be having little impact.  In a 2002 survey, the average score on a financial quiz was 50%, and those who had completed a course in money management scored lower, just 48%.

If you wait until your kids are in high school, you've waited too long.  They already have developed habits around money and you have to correct those before you can begin teaching good habits.  If they've seen you whip out your ATM card on a daily basis-and never seen you making a deposit-what sort of message does it send?  How do they perceive it if they notice that you go out and spend money-for fun-after you've had a particularly rough week?

You may want to consider starting an education account that you match dollar for dollar.  Start young.  In order for kids to learn about money, they need to have some control of their own spending.  

Allowance should be the tool to teach them about financial responsibility, not tied to any type of behavior like good grades.  You can pay them for doing extra work that you would have paid someone else for, but not for things that they are expected to do.  Give them some money to handle and let them learn the natural consequences of not saving.  

 

Kids whose parents allowed them to spend money on things they didn't really need are more likely to be spenders than savers now that they've grown up.  They're less likely to have achieved their financial goals (or even have made significant strides toward them).  And they're more likely to say money is a cause of worry.  

Encouraging your children to work during their high school years - perhaps by not giving them every dollar they want - seems to breed fiscally responsible adults.  those who have stared to achieve (or have actually nailed) their financial goals are more likely to have worked through high school.  People who worked through high school are also more knowledgeable about investing than their nonworking counterparts.  Likewise, people who hade to work their way through college seem to have emerged with positive money behaviors.  Not surprisingly, they also emerged with higher than average credit card debt (not to mention student loans).

If you are leaving an inheritance to your children, you may want to consider that the younger the generation you are leaving it to, the more they see money as power and social status.  You may want to set up a trust that pays them dividends rather than leave them a lump sum (this will also allow you to avoid taxes on it if you set it up correctly).  

By -- Jean Chatzky     www.jeanchatzky.com 

Buy This Book