Eight Secrets of Financial Happiness

Here is a simply great article from Market Watch that lists the eight secrets of financial happiness. It starts by describing the relationship between money and happiness:

The psychology of money, now known as behavioral finance, has a positive side. It turns out you can use psychology to increase your financial happiness by reducing your money stress.

Fortunately, this psychological formula is simple: Stress down equals happiness up. So how do you cut the stress? Try a new mindset: Stop blaming "them," take responsibility and then take positive actions. What's happening "out there" is no excuse for whining. You can't change them, but you can control you.

The piece then lists their eight secrets of financial happiness:

1. Learn to want less.
2. Get organized.
3. Set goals.
4. Plan your spending.
5. Invest sensibly.
6. Protect what's yours.
7. Start talking about money.
8. Find work that fits.

Here are my thoughts on each of these:

1. Learning to want less is the first step in spending less than you earn, which is the first step in becoming a millionaire.

2. I use Excel to budget, Quicken to track, and have files for all my paperwork. Being organized makes managing your finances easier, more effective, and less time-consuming.

3. We set annual goals as part of our budgeting process.

4. Yes, we plan our spending -- it's called a budget. Here are some good budget-related posts to review:

• Why We Hate Budgeting - But Shouldn't


• A Great Alternative to Quicken and Microsoft Money, Part 2


• Five Keys to Developing a Successful Budget

5. Three keys to investing for me: 1. Invest regularly. 2. Time/the power of compounding. 3. Index funds.

6. Yes, you need to protect what's yours by making sure you have a will and have all your insurance needs covered.

7. Communication is key in a family, and this includes talking about money. If nothing else, planning/having a budget will force you to do this (which is a good thing).

8. Your career is your most valuable asset and by managing it correctly you can add millions to your earning potential. But you also need to enjoy what you're doing. If you don't, maybe a career change is called for.