Money and Happiness

Ah yes, this old chestnut. I'd like to talk about a couple of things I have learned about how money has influenced my happiness. Firstly, and importantly, I've found that it's not money itself that has led to me being happier lately, but the understanding of how it works and knowing that I have it under control. Money is simply a game or a tool and understanding it and having a good picture of what's coming into my account each month. I cannot recommend strongly enough that you complete the budget exercise and the Net Worth exercise to get a clear idea of where your money is going.

This brings me to the second money-related idea of happiness. I'm a lot happier since I moved to a cheaper neighbourhood. The book that kicked this idea into my head was The Black Swan, (see my suggested reading link on the right). Amongst many other things, it discussed the human condition of never being satisfied with what you have and always looking to those who have more than you. Thus, people tend to move into areas that are just a little more expensive than they can afford and have difficulty avoiding the envy of the Jones's bigger car / house / garden next door. Rather than try to control my envy of others, I just accept that it's part of who I am as a human and have used another money rule to help me move somewhere where I am (probably) better off than those in my immediate area.

I really don't want this to come across as some sort of snobbery. That's the flipside of the human condition - tending to look at those with less as stupid / unworthy / lazy. But that's not what I mean and certainly not what I feel.

Anyway, back to another money rule that has helped me - spend no more than 25% of your monthly income on rent / mortgage payments. I used to spend close to 33% of my income on rent. I lived in one of the "trendy" areas of my city - you know the type, lots of cafes, bars, clubs and boutique shops. Sure, it was convenient and lively, especially as I had just moved here. But I couldn't help but feel that I was a lot worse off than those around me - the women driving the 4x4s, the men driving the Porshes. The funny thing is that I'm really not a materialistic person (I know, I'm sure most people say that!). I have very few belongings now and no longer look forward to spending money on some "thing" I've been looking forward to. Ever since I moved to a cheaper area, as well as having a little more disposable income, I feel fortunate. I'm not driving a nicer car or living in a bigger house than those around me, but I'm appreciating the things I do have - simple things like hot water, a cosy bed, lots of food in the freezer / fridge.

Pay a quick visit to - it can really put things into perspective. And I think that's what money and happiness is for me - knowing that I'm really fortunate in the grand scheme of things and knowing that I have it under control.


  1. All to true my friend! you helped spark my interest in the financial side of life. Now all i need to do is win the lotto, lol :/


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