As women, I think one of our great strengths is discussing and evaluating relationships. When we get together for a coffee or a prosecco (personal preference), we can really dig in and talk in detail about how things are going with our partner, with our friends, with our family, our boss. I get both a great release from discussing relationships with my girls, and often get thoughtful opinions and direction. How to deal with arguments with siblings, nightmares over holiday plans – you know, all that good stuff gets discussed.
I’m sure you also have those chats all the time too, and look forward to the help (and sanity) relationship talks can give you. What about our relationship with money? That phrase even sounds goofy – I mean, money is an inanimate object, how do you have a relationship with it? Well, in a way, I think it’s really about how you treat yourself. If you think of your relationship with food, or fitness, it’s easier to articulate your thoughts. I personally think about exercising daily (which I really enjoy), and how much discipline do I put toward my food choices (a continual struggle, I love me some sweets!). Everyone has to reconcile their food and exercise choices with how healthy they want their lifestyle to be, balanced with discipline of course.
A relationship with money is honestly quite similar. For me, I balance the life I want, with the discipline I can maintain. When I want to lose weight, I know I need to clamp down on the sweets and the carbs. When I think how do I feel about money – again, it sounds goofy – but I want to have a healthy financial life, so I feel confident and secure, never terrified of paying the bills, but also like I have some luxurious options. I’ve learned to love saving, and watching my savings and my investments get bigger when I look at the monthly statement. (I try not to look every day, investments go up and down – kinda like not looking at the scale and weigh yourself every 2 hours – maybe you hop on the scale once a week). So to HAVE the money to add into my investments, I’ve learned I want to cap my spending, so some of my earnings go into investing each month.
That said, we all have areas we love to spend on! For me, travel is a top priority, going on trips frequently and staying in boutique hotels (never a chain hotel for me), filled with charm, learn the feeling of a new place. What areas of spending bring joy to your life, in a lasting way? When at home, I’m not a big cook, so going out to dinner is another splurge for me, an area I spend on – I look forward to dinners out. Those are my two areas, and I have an annual budget for those two items (gotta have some discipline), and divided by 12, I have a rough monthly guide – if I go over some months, I gotta rein it in other months. Again – like my carb intake (I have so much of a sweet tooth, it’s really most honest to say sweet TEETH), balanced with continual exercise.
But really, what I love is reaching a point where I have no fear about money. THAT’S relationship gold, in my book. It has taking years – let’s be honest, decades – of discipline (spending and earning), but I’m happy with the balance I’ve found. Nobody wants to be a position where the choices in their life solely are driven by money – and many people do live that way. The difficult part is that many of us think ‘if I just have more money, I’d be happier’. Like being thinner, or fitter – wouldn’t I be happier? But I think fit people would tell you they are happy with that aspect of their lives, but that ALONE doesn’t make them happy. What about money? If you had $5M, would it make you happy in life? How much is the “happiness number”?
There was an interesting study at Princeton published in 2010 (by economist Angus Deaton and psychologist Daniel Kahneman) that found that we need about $75,000 a year to conquer the “fear”. If someone’s income is below that, they had more stress and sadness . But people making MORE than that, didn’t find any GREATER happiness. Once you got to $75,000 a year, in their estimation, the survey respondents reported less daily stress – more happiness.
Interesting, right? Careerbuilder did a survey in 2017 that found that 1 in 10 people making more than $100,000 were still living paycheck to paycheck. So they have stress and fear about money on a daily basis. But that means 90% of them had conquered the fear, and were saving and investing.
About 28% of people making between $50K-$100K were living paycheck to paycheck (no savings), and 70% of those people are in debt. Gets worse if you make less – half of people making less than $50K are living paycheck to paycheck, with 73% of them in debt. Another study published in 2018 again found people earning $60-75K reported more day to day happiness, and earning over $95K was the “peak happiness” level. So yeap, it looks like getting rid of daily money anxiety ends at a certain point. THEN you can stop worrying about money….and just focus on finding joy in your life.
Warren Buffet, billionaire, has talked about (video here) more money doesn’t really make you happy, as you always envy the next guy making MORE than you. Instead he says to focus on your daily life, the journey of making money. Spend time on the things that actually bring you happiness (for him I think it’s making money). All that make sense to me – I want enough security to feel confident, and do things I love. But I don’t want my relationship with money to dominate my daily life, or my pursuit of happiness!! What do you think? How do you find happiness in your life, and how does money factor in?