Discover the Path to Economic Happiness

Physician's Money DigestFebruary15 2004
Volume 11
Issue 3

You Don't Have to Be Rich: Comfort,Happiness, and Financial Security on Your OwnTerms

It's an easy assumption to make: If I had moremoney, I would be happier. But is it actuallytrue? A new book by financial advisor JeanChatzky, (Portfolio; 2003), reveals some interestinganswers and finds some common behavior—not necessarilycommon salaries—among people who considerthemselves financially happy.

Financial Detective

Money, Time,



As a columnist for and and the financial editor for NBC's Today,Chatzky found herself deluged with e-mails fromreaders and viewers. Many, but not all, wereanguished about their sinking 401(k) plans, disrupteddreams of an early retirement, fears of unemploymentand debt, and other financial hazards. Eventually,Chatzky began to wonder why the same recession andthe same stock market dive caused such differentstress levels for people with similar incomes.Chatzky found no useful data to provide her with ananswer. According to Chatzky, “When I started lookingfor lists of behaviors and habits, things you could actuallyalter in your life that would positively impact yourrelationship with money, I found nothing.†So, with thesupport of Money and the Roper Organization, Chatzkyorganized a survey of more than 1500 Americans. : to find out the following financial truths:

  • What influence money has over an individual'soverall happiness
  • What habits, attitudes, behaviors, and knowledgeseparate those who are satisfied with their financial livesfrom those who are not
  • What effect changing those habits, attitudes, andbehavior might have on a person's life

Interesting Results

Nine factors affecting happiness were studied,including marriage and job satisfaction. While severalfactors play a bigger role than money in determininghappiness, money was found to be the biggest contributingfactor to a person's unhappiness. “Money canbe a bigger cause of unhappiness than many other factorsin your life,†Chatzky writes, “It can—without adoubt—make you miserable.â€

However, it is the issue of how much control we feelwe have over our money and not how much we rake inannually that most separates the financially happy fromthe financially unhappy. In fact, Chatzky's researchshows that overall happiness seems to level off at anannual salary of about $50,000. In addition, Chatzkyfound that good money habits can deliver happinessequivalent to an extra $25,000 a year.

Monetary Contentment

What makes people feel more in control of theirfinances? Chatzky learned that it's not one big thing, buta number of little things. In her latest book, she outlinesthe “Ten Commandments of Financial Happiness.â€These are common habits and behaviors shared by peoplewho are usually happy about their finances.

Following are a few examples of what you can do tobecome a financially happy person:

  • Get organized. The ability to find the statement,bill, or receipt you're looking for can make you happier.After all, not finding it can make you very frustrated.
  • Pay bills as they come in. Paying your bills whenthey come in rather than once a month is less overwhelmingin terms of time and how you feel about thebottom line.
  • Save at least 5% of your household income.“Those who manage to save are happier,†Chatzkywrites. To make saving easier, consider having yourmoney automatically transferred into a 401(k) or IRA.This way, you save without ever seeing it.

Keep tabs on cash. Does money seem to disappearfrom your wallet? Chatzky recommends saving receipts,sticking to a daily budget, putting yourself on a regularschedule of ATM withdrawals, and paying all bills froma single checking account.

These and other steps go a long way toward reducingstress levels, increasing your sense of control, andgenerally boosting day-to-day happiness, withoutadding a dollar of extra income. For more information,visit

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