Like me, you may have gone through some discontent with your current lifestyle. “Is this all there is?”
It’s an important question to consider when you’re thinking about money. The whole point of money is to build a life for yourself. What kind of life do you want?
I think a lot about what I value — what made me happy this week, month, year. So often, the things I’m spending money on and the things that make me happy aren’t the same.
I guess that experience isn’t uncommon. In spite of our rapidfire spending on everything from bigger cars to bigger Christmas blowouts, Americans remain deeply unhappy.
In 2017 alone, we spent $1.7 trillion on ‘durable consumer goods.’ Durable consumer goods are things that last, as opposed to non-durable goods like groceries and gas. Of that $1.7 trillion, $600 billion was spent on recreational goods like consumer electronics.
And yet with all our Sonos speakers and PS4 systems and Ninja blenders, we’re not getting happier. According to the 2018 Gallup-Sharecare Well-Being Index (GSWBI), which has surveyed 2.5 million Americans, Americans’ happiness in 2017 dropped the most it has in 10 years — even more than it did during the recession. (The index defines happiness as ‘subjective well-being.’)
The disparity between spending and happiness makes me wonder: is spending on this stuff even worth the hassle of going to the store? Maybe we don’t know what we really want. Maybe we don’t know what makes us happy.
The 5 factors of well-being measured in the GSWBI are:
• Purpose: liking what you do each day and being motivated to achieve your goals
• Social: having supportive relationships and love in your life
• Financial: managing your economic life to reduce stress and increase security
• Community: liking where you live, feeling safe, and having pride in your community
• Physical: having good health and enough energy to get things done daily
Stuff and vacations are not in there.
Let me be the first to say that some types of discretionary spending can add to your happiness. Studies show that spending money on experiences can add to your happiness. As Time Magazine points out, “Doing things can bring us more joy than having things.” I went to Mexico last January and had a great time. But what you won’t see in the literature is any studies that indicate that a more expensive experience will make you happier than an inexpensive one.
I challenge you to find one happiness study indicating that extra stuff or more expensive vacations make you happier.
Cornell Psychology Professor Thomas Gilovich, who has conducted 3 studies on money and happiness, tells us the reason why buying stuff doesn’t make us happy:
“One of the enemies of happiness is adaptation. We buy things to make us happy, and we succeed. But only for a while. New things are exciting to us at first, but then we adapt to them.”
So let’s cut the bullshit. What really makes you happy? If you were to plan your life around a few wonderful things, what would they be?
Here’s my short list:
- freedom
I want to have enough savings to say, “I think I’ll take a year off work and go to Mexico,” or “My mom needs help, I’ll go help her.” I want to be able to say, “No” to an abusive boss or an unreasonable project and know that even if I get fired, I’ll be just fine money-wise.
- my time
I value having the ability to do what I want, not feeling exhausted by a series of unfortunate [stressful] events. That’s why I don’t work a lot of extra hours. That’s why I’m putting my money toward reclaiming my time through early retirement.
- skill building
There is great fulfillment in honing a craft. Right now, I’m doing that through writing software at work and my watercolor painting. Unlike consumer goods, skills age well.
- relationship building
I love my friends and family. It feels so great to come home every day and talk to my housemates, or to get an email from a friend talking about the skateboarding bulldog they saw today.
I have a passion for community building, something I currently do at work. And I want to have room in my life for kindness. As the Dalai Lama is fond of saying, “My religion is kindness.”
Notice that not one of the things I’ve listed requires early retirement. Sure, early retirement would give me more flexibility for these things. But I’m also working on all of them right now. If you were to think about it — really sit down and get quiet and think — what makes you happiest in life? What would you like to see blossom in your life in the weeks and years to come?