How to let your money buy you happiness

Today I want to introduce you to a superb financial writer with whom I have a passing acquaintance and tell you about a new book he’s published called How to Think About Money. You may recognize his name, Jonathan Clements, from his many years as a columnist at The Wall Street Journal and Forbes.

In my own writing, I focus on the steps you should take to save money and invest it properly. Jonathan, on the other hand, is focused on getting you to think properly about your money. He believes — and rightly so — that if you think properly, you are likely to act properly.

In my 2011 book, Financial Fitness Forever , I included a chapter on where to put your trust. If you get that one decision right, it will lead you in the right directions regarding most of what you should do. Likewise, Jonathan believes that if your thinking is sound, you’ll be more likely to do the right things.

In his introduction, he says that 31 years of writing and thinking about money led him to realize “that very few of us will beat the market, that saving diligently is the key to amassing wealth, that money buys limited happiness and that much of the time, we are our own worst enemy.”

There’s so much good stuff in this relatively short book (158 pages including source notes) that I’ll limit myself to outlining its major themes, sharing a few practical tips, and focusing on one chapter I think is especially important.

Making the Most of Your Money

Toward the back of the book, Jonathan recaps his message with 12 practical suggestions. To give you a flavor, here are four paraphrased highlights:

• Design your life so you can spend your days doing what you love.
• The harder you try to beat the market, the more likely you are to fail.
• Retirement is your most important and most expensive financial goal.
• Protect your savings from excessive costs, poor diversification and the failure to insure against major financial risks.

Money and Happiness

I want to focus on Jonathan’s first chapter, which examines the relationship between money and happiness — a topic that gets far less attention than it deserves.

“There is a connection between money and happiness, but the relationship is far messier than most people imagine. If we want to get the most out of our dollars, we need to think much harder about how we spend and which goals we pursue.”

1. Experiences often bring more happiness than possessions

Research suggests we tend to get more lasting happiness from experiences than from buying things. Experiences give us anticipation and memories that often grow fonder over time.

Jonathan also points out that keeping up with the Joneses is a losing game: no matter what you buy, someone else will always have more. But they won’t necessarily have better experiences.

2. Spending money on others can increase happiness

Generosity can be deeply satisfying. It signals that your needs are met, allows you to make a difference, and strengthens your sense of connection to others.

In that sense, generosity makes you a bigger, more connected person.

3. Fewer choices can sometimes mean greater happiness

While Americans value choice, too many options can create anxiety and dissatisfaction. As Jonathan writes, uncertainty can be the enemy of happiness.

“Happiness lies not in the choice,” he writes, “but in making a decision and eliminating the choice.”

This book is packed with insights like these, and I hope you’ll read it. It would also make a thoughtful gift for a young person starting out.

You can read Jonathan’s official announcement of the book here: How to Think About Money — HumbleDollar

You can also find the book here: How to Think About Money on Amazon

Richard Buck contributed to this article.