Monthly Archives: December 2014
“Money doesn’t buy happiness and it doesn’t guarantee happiness, but it impacts your happiness in a huge way,” says Donna Skeels Cygan, a certified financial planner, owner of Sage Future Financial in Albuquerque, New Mexico, and author of “The Joy of Financial Security.”
To write her book, Cygan spent six years researching psychological studies, economics, neuroscience and international studies on the impact of poverty.
“I became fascinated by the idea that while 50 percent of our happiness is controlled by genetics and 10 percent is environmentally controlled by things like whether you grew up in poverty or in a big town or a small town, 40 percent of our happiness is completely within our personal control,” she says.
She believes that taking small, sustainable steps such as these toward financial security is the best way to feel more in control of your money and your happiness.
1. Spend Your Money on Experiences, Not Things
“Researchers have found that when you buy a new car you get short-term, temporary happiness, but if you focus on strengthening your relationships with your friends and family and shared experiences, you’ll have greater long-term happiness,” says Cygan. She recommends spending money to take a friend to lunch, attend a concert, visit a museum or even travel — if your budget can accommodate it.
“One of the best things you can do is to organize a family reunion and to splurge to bring the family together,” she says. “Often the older generation will have the means to pay for the younger generation, and the reward is greater happiness for everyone.”
2. Spend Your Money to Improve Your Health
Cygan says your physical health should be a high priority, so she says it’s smart to spend money on, say, a cooking class so you learn to eat healthier food and then spend less on eating out. Depending on your budget, she suggests hiring a personal trainer or signing up for fitness classes.
3. Simplify Your Life and Your Finances.
Cygan cites “The Life-Changing Magic of Tidying Up” by Marie Kondo as inspiration for her suggestion that decluttering your home and your office and spending less money on things like shoes and clothes can be beneficial to your bank account as well as to your mental health.
“When you look at your home and find it cluttered with things you’ve bought, it can be a wakeup call to spend your money on saving and investing for financial security instead of things,” she says. “It can help you push back on the idea of ‘keeping up with the Joneses’ and recognize that living within your means is an important value to share with your family.”
Cygan says simplifying your finances is equally important. “There’s no reason to have 13 bank accounts or to have scattered retirement accounts from several jobs. It’s best to consolidate everything so you truly know what you have and can take an organized approach to your finances.”
4. Change Your Routine
Cygan says that stepping off the treadmill of work and errands to go someplace for a day trip or to try a new volunteer activity can bring emotional and financial benefits. “Trying something new can pay off in the long run because you’ve opened yourself to new experiences that can enrich your life and perhaps even enhance your career in an unexpected way. Even if you have to spend a little money to indulge yourself, that can be a good thing.”
5. Be Generous
Cygan says that whether you volunteer your time or write a check, being generous to those who are less fortunate can bring you greater happiness than spending money on yourself. “A reward center in your brain lights up when you’re doing something for someone else.”
6. Pay Attention to Your Life, Your Friends, Your Money
Cygan says a lot of money gets wasted when people buy things or sign up for services and then forget about them. “Everyone is so busy, but if we stop to pay attention to how much we’re spending on unnecessary things and focus more on things that make us happy such as being with friends or nurturing our creativity, we’ll be financially better off and more content.”