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.

Comments

[Dr. Artfredo C. Abella Ph.D]

Herewith are my comments regarding the Eight Steps to Financial Happiness:
1. Learn to want less.
This formula is really one golden rule for financial success and happiness, I would add rather - earn more but want less is the surest way to financial independence and happiness.
2. Get organized.
Those who fail to plan, plan to fail. A place for everything and everything in its place. These two concepts would further internalize the above stated pronouncement.
3. Set goals.
Be careful if you do not know where you are going because you might not get there. If you do not have a goal, let us say of attaining financial happiness then how will you be able to reach there. Having a goal in life is a must whether for education, vacation, tour, buying a hotel, airplane, new car, owning a swimming pool or even writing a book. The first formula for success is having first a goal or have a destination then by all means attain it.
4. Plan your spending.
Having and creating a financial budget is a road map for overheads. Those who prepare their budget is creating a safer haven in terms of their consumption and expenditures. Profits could be rationally anticipated by having a budget.
5. Invest sensibly.
Idle money and cash should be invested. However, put your money only if you know where it is being invested. Get to know the financial profiles of companies you want to own that way you do not become vulnerable to business risks.
6. Protect what's yours.
Insurance is one way of sharing your risks with other agencies in times of fortuitous and force majeur events. Protect your family with life, health, accident and fire insurance. Protect your employees with the same insurance that you have and the interest of your employees will be assured.
7. Start talking about money. Those who marry with money will surely earn it. If you love money then start taking action right now.
8. Find work that fits. Love what you do and the money will come. Do not be a square peg in a round hole. Create more values in life and financial happiness will knock at your door earlier than you expect.

[SimonD]

I think this advice is great. More people today are becomming increasingly obsessed with having more money or living a lifestyle they cannot afford to fund. This is how many people have and are falling into debt. Learning to be happy with whatever money and lifestyle you have is essential if you want to be and stay happy.

[Financial]

In today world many people spend more than they earn and end up with huge debts. It is very important to plan for your spending and earning power, and invest your money wisely.

[Prasanna Kumar]

Wat could be te Possible investment oppurtunities that are prone to less risks?
Can anyone clarify this?

[Kevin]

In the present financial scenario, it’s very important that we try to improve our financial condition. I must say you have provided great information and secrets of financial happiness. Though most of us are aware of some of them, but hardly apply them.
I will certainly try to follow these steps and take a step forward in achieving financial abundance. Even though to strictly follow the steps won't be an easy task but will certainly work on it. And hope people would do the same.

[Jerry]

I love the list. Of course, much of it is common sense but we all know that it ain't so common. Following these tips are not easy but they lead to success. I have to admit I do everything but #3 and #6. I don't have life insurance yet. Crazy?? I know. It's laziness. And, planning is something I've avoided. I'll have to look into that. But, I'm making progress. Thanks for the reminders.
Jerry