This is a great question from Melissa:
The struggle I have with all personal finance advice is that it is always predicated on depriving yourself. You have to spend less money, or else you have to give away more of your time and energy to earn more money. I am happy with my life as it is right now with the exception of my finances. If I make a change so that I am happy with my finances, I am unhappy with something else.
This is such a great question, and I love how Melissa stated it. She really hits the nail on the head when it comes to the idea of financial success and sacrifice.
Let’s dig right into this, shall we?
Is Life a Zero Sum Game?
When I read Melissa’s question – or similar questions I’ve received from other readers or from other websites – I hone in on one key section that just draws my attention:
I am happy with my life as it is right now with the exception of my finances. If I make a change so that I am happy with my finances, I am unhappy with something else.
The idea being expressed here is that in order to gain happiness with one area of your life, you have to lose happiness with another area in life. You can’t gain without losing something.
This is known in game theory as a zero sum game. In a zero sum game, “each participant’s gain or loss of utility is exactly balanced by the losses or gains of the utility of the other participants. If the total gains of the participants are added up and the total losses are subtracted, they will sum to zero.”
In other words, Melissa’s question relies on the assumption that there exists only enough time, money, and energy to be content with most areas of life, but not all areas, and if you shift time, money, and energy to another area of life to shore up contentment there, you’re losing contentment in another area and will become unhappy with it.
(Notice, please, that I’m shifting from the idea of “happiness” to the idea of “contentment,” because I don’t actually believe a person can “buy” happiness with money, time, or energy, but can only fertilize one’s life for the potential of happiness. I refer to that fertile ground as “contentment.” It’s a subtle difference, but it reflects the idea that I don’t believe money or time can actually “buy” happiness for anyone, but it can create situations where happiness can grow. This is why wealthy people can be very unhappy and impoverished people can find happiness and why idle people can be very unhappy and super-busy people can find happiness.)
In a nutshell, I don’t agree with that “zero sum” assumption about life and the possibility of happiness at all. In fact, I believe that virtually everyone can make shifts in their life and their use of money, time, and energy that increase their likelihood of finding sustained happiness.
A lot of this happens, I think, because over time our perspectives on what actually brings us contentment and joy becomes skewed, and here are some reasons for that.
We Aren’t Good at Assessing What’s Truly Important in Our Life
To put it another way, we often overvalue how important some things are to our happiness and contentment and undervalue how important other things are to our happiness and contentment.
There are a number of reasons for this. We often overvalue things that are urgent, convenient, and provide short-term pleasure. We often undervalue things that aren’t immediately in front of us and won’t have a quick payoff. We are wired to be like this by default.
Because of that perspective, we tend to fall into mindsets where spending a found $20 on a treat is a far better choice than putting that $20 toward paying off a debt or toward saving for retirement. That treat is far more urgent, far more convenient, and far more likely to provide short-term pleasure than doing something responsible with it, which is why the vast majority of the time the vast majority of people will find some “fun” way to spend that extra $20.
If you look at things from that perspective, it’s easy to see why 78% of Americans live paycheck to paycheck, which includes a lot of people making far more than $100,000 a year. How can that happen? It happens when the short term constantly trumps the long term and people consistently make mistakes in evaluating how much things really matter in their life.
How do we improve our self-assessment? A lot of this comes down to spending time considering and appreciating the relative amount of happiness that various things bring us in our life outside of those urgent moments when we really want something.
One great way to do this is to spend some time going through each credit card statement and bank statement and evaluating how much personal value you really got out of each purchase. Just go through them one at a time and ask yourself seriously whether that purchase brought you any real lasting value in your life. Do you even remember what you bought? If you can’t, then it’s probably a sign that it wasn’t a good use of money. If you can but it doesn’t set off any particular bells of excitement, it probably wasn’t a good use of money.
When I go back through my statements and I see purchases that I can barely remember and don’t fill me with any excitement, I realize that those really were pretty dumb purchases, driven solely by the heat of the moment and nothing of any sort of lasting value. Often, people translate that into some sort of opposition to spontaneity, but I tend to believe that good spontaneity is remembered, and you’re training yourself on how to avoid bad spontaneity. Bad spontaneity is forgotten spontaneity, something that brought you so little lasting pleasure that you can barely remember it even just a few weeks later.
My goal in life is to basically eliminate as much “bad spontaneity” as I possibly can while leaving all of the “good spontaneity” in place. I want to spend my money on stuff that’s meaningful and memorable and stop spending any money on stuff that’s quickly forgotten. One way I train myself to do this is to go through those bank and credit card statements.
Another good strategy is to think about recent spending experiences when the moment is over. Think about something you bought several days ago or a week ago. Run it through your mind and ask whether it was really something that gave you real significant value. Is it just another forgotten treat in a long line of forgotten treats? Or was it really worthwhile?
I do these types of reflections during a daily journaling practice. Each day, I spend a little while in the morning writing in a journal, and one thing I write about each day is an “after action review” of something I’ve done recently – maybe a shopping experience or a social interaction or how I spent a couple hours of my time. I think through whether it was really a good use of my time or whether I could have done things better, and I find that process, doing it each day over a long period, has a gradual positive impact on my choices in the moment. It’s like there’s an undercurrent of understanding what really ends up being best for me in the long run.
We Often Skip Over the Pleasure of the Current Moment
This might seem like a strange counterbalance of the above, but I’m actually talking about something very different. I’m talking about how often we don’t really think about what we’re doing in the moment, particularly when we don’t view it as obviously pleasurable, and we let our minds move on to other things. Thus, we lose a lot of potential joy in what we’re doing.
This might seem like a very “zen” thing to talk about on a personal finance site, and the application might not be clear at first. However, I will say this: as I have come to focus more and more on the pleasures and detail of whatever I’m doing right now in this moment, the more content I’ve felt with my life as a whole and the less impulse I feel to spend money to bring myself more pleasure. I’m simply not reflecting that much on fun things that might come that I might spend my money and time on and instead seeking it in the moment by focusing on whatever it is that I’m doing right now.
In other words, most of my daydreaming and mind wandering is actually escapism because I’m not even bothering to look at what’s good in the current moment. When I start to look for that good, my mind spends less and less time thinking about “what ifs” – things like what I might buy or what I might desire.
This is surprisingly hard to do in the course of an ordinary day, but I find that the more I do it, the easier it becomes, the more valuable it is to me, and the less desire I have for other things.
For example, let’s say you’re eating a meal with your family. Rather than thinking about what needs to be done after the meal or what desire you might have or whatever your mind is wandering off to, try instead to focus on the meal itself. What does the food taste like? Smell like? Look like? How does it feel in your mouth? What if you rinse out your palate with a bit of water and taste a bite anew? Are you still hungry, or are you starting to feel sated? What is the conversation about? What is that other person actually saying (this is not just waiting until your turn in the conversation to say something on your mind)? Are the people you’re dining with happy? Sad? Angry? Calm? Frustrated? Why? Think less about how you feel in response to those things, but instead about the nature of the people and things around you.
I find that the more I switch into that mindset, the better daily life feels. It is stuffed full of all kinds of things to appreciate, and I begin to feel like I need less and less stuff, particularly new stuff, to find joy. I feel happier with the people around me because I appreciate them as distinct rather than just as an extension of me. I just simply feel happier with what I have, and that makes it much easier for desires to just vanish without feeling unhappy about it.
How do we improve the pleasure of the current moment? Obviously, the first thing is to recognize that it’s a good thing and try to do it. When you’re doing something today, particularly something mundane, start to look for the details in it. If you notice your mind drifting away from the moment, bring it back to the moment and focus on the details of where you are, what you’re doing, and what’s good in it. Right now, for instance, I’m seated in a comfortable chair and my bare feet feel nice as they graze the floor under me. My belly feels content but not over full as I ate a meal recently. I’m enjoying thinking about the next thing I want to write. This is the moment I am in, right now, and there is a lot to like about it.
If you find that staying in the moment is really hard – and it is – you can consciously practice it through mindful meditation, which is something I do every day for 15 minutes or so. I find that repeating this practice over time has helped me to feel a lot calmer and more in control over my emotions and impulses and much more able to stay in the moment and appreciate it in my everyday life.
The practice is easy. Just sit somewhere comfortable, close your eyes, and focus on the in and out of your breathing for just a few minutes. You basically want to pick a period of time where it begins to get really hard to keep it up for that period of time; believe it or not, just two minutes is a good place to start. Just focus on your breathing – breathe in, breathe out, breathe in, breathe out. Focus on nothing else, and if you find your mind wandering, bring it back to the breathing (but don’t feel bad about it, that’s just how our mind works). I view this as being like “gym reps” for my focus, which I view as being like a muscle.
The better I can focus on the moment, the more joy I find in that moment and, from there, the less desire I have for wanting other things. It makes it much easier to be content and happy with whatever I have and whatever I happen to be doing in the moment and less desirous of wanting more and more and more.
We Rely Far Too Heavily on Our Future Selves
From a very early age, we become accustomed to a particular type of procrastination in which we indefinitely postpone a lot of important but not urgent tasks under the assumption that our future selves will take care of it.
Calling Grandma? Our future self will do it. Saving for retirement? Our future self will do it. Getting in shape? Our future self will do it. Doing a money-saving home improvement task like installing weather strips? Our future self will do it.
It’s a very easy way to free up time and money and energy in our life for things that aren’t as important but are more seemingly urgent, like the desire to veg out on the couch or go shopping, something we perceive as immediately pleasureful.
The catch, of course, is that we often never get around to doing those important things, and those undone important things pile up in our lives, making things worse. For most of us, our current lives are shaped by piles of important things left undone by our past self.
We didn’t call Grandma as much as we should have, and now we miss her and would give anything to talk to her again.
We didn’t save for retirement and now it’s just a few years down the road… or, in truth, it’s going to come far later than we ever wanted, and now we have to work several more years in a body that’s starting to break down a little.
We didn’t get in shape and now our body feels prematurely old. We can’t get around as well as we used to. Some of us seem to be becoming big customers of the pharmaceutical companies.
We didn’t bother to do those little tasks we should have done and now thousands upon thousands of dollars have slipped needlessly through our fingers, money we certainly could have used now.
All of those important but not urgent things left undone in the past now pile up on our doorstep today, shaping our life and burdening us when we’re older and less able to handle all of it than we once were.
How do we fix overreliance on our future selves? The thing is, no matter where you’re at in life, you can start reversing that trend.
Do important things right away, even if they’re not urgent. Call Grandma if you haven’t called her recently. Put some money away for retirement. Install that weather strip. Get some exercise. Fill your life with authentic, important, meaningful things that will mean a better tomorrow.
When you start dropping things that really aren’t important and replacing them with things that actually are important to you, you start feeling like each day is more worthwhile. You did something good today, something meaningful, something that will last. You feel better about things when you go to bed at night.
Furthermore, you’ll gradually notice that your day-to-day life feels less overburdened with things left undone. It’s a subtle change, but it’s a change that slowly melts away a certain level of underlying stress in your life, which itself eats away at your basic level of contentment and joy. We’ll get back to this in just a moment.
If you’re not sure what important things are left undone, give it some careful thought. Ask yourself what things you should be doing to reduce the burden you’re going to face in the future. What things can you do to cover your future bills? What things can you do to reduce your future expenses? What things can you do to build the foundation of long-term relationships? Those are the kinds of “important but not urgent” things we constantly overlook.
We Consider a Rather Large Amount of Stress to be Completely Normal
As I just mentioned, most of us simply live with a pretty substantial amount of underlying stress in our lives. It’s a stress that we consciously try to ignore as much as possible, but it sits there like a potent acid, slowly eating away at us. It makes us quicker to anger and sadness and less capable of appreciating everyday joy. It distracts us, it eats away at our physical and mental health, and it leaves us feeling exhausted much of the time.
Finding ways to reduce that underlying mountain of stress is one of the most powerful things we can do as modern people, and the journey along the path of financial success goes a long way toward melting away that stress. You’ll also find that stress reduction is a two way street – once you start enjoying a lower stress level, you’ll want to continue doing things that keep your stress level low.
How do we reduce our stress levels? There are many, many things that help with stress management. For starters, simply getting a grip on your finances helps a lot. Digging out of the worst of your debt and starting to save for the big things like retirement can have a tremendous positive impact on one’s stress level. Taking action to shore up your career instead of being paranoid and worrying about every twist and turn at your job is another thing you can do.
I’ve found over the years that different techniques seem to help different people with their stress. For me, things that really seem to help include getting plenty of sleep, walling off dedicated time for hobbies and leisure, eating a healthy diet, getting adequate exercise, reducing my debt load, and many of the other strategies mentioned in this article such as meditation.
It’s worth noting that many of these activities simultaneously reduce stress and contribute to a sense of feeling good on a day to day basis, which is another core part of feeling content with what you have.
We Confuse Leisure, Idleness, and Rest
Let’s distinguish what I mean by these things.
Leisure time is waking time that’s spent on things that are purposeful but also relaxing. For me, things like exercise or reading a book fall into this category.
Rest time is time that’s spent on things that are purely relaxing and not purposeful beyond that. In general, if I want rest, I go take a quick nap or go to sleep or I meditate (which feels very restful to me).
Idle time is waking time spent on things that are neither purposeful nor relaxing. They often seem to be relaxing or restful, but it’s actually just time spent without any genuine purpose or restfulness. Things like idle web surfing or channel surfing fall into this category.
In day to day practice, the lines between these areas sometimes blur. For example, I might want to spend some time with my wife in the evening, which seems purposeful, but we end up watching a television show in a half-awake state and it ends up being neither relaxing nor purposeful. We would have been better off going to bed and cuddling up as we drifted off to sleep.
I find that the less time I spend on idleness (according to this definition) and the more time I spend on leisure or rest or even productive activities, the better off I am. I think that a lot of things I consider “restful” are things that other people might consider “idle” because they’re not productive, but they are purposeful. There’s a reason for what I’m doing, even if it’s just brainstorming.
How can we distinguish leisure, idleness, and rest? There are a few things I do to try to remove “idleness” (as described earlier) from my life.
First of all, if I feel tired, I go take a nap or go to sleep. I don’t force myself to stay up for silly reasons like “it’s too early to go to bed.” If I’m tired, the time I continue to spend awake won’t be very productive or purposeful, so I simply get genuine rest.
Second, I literally block off significant time each day for hobbies. I have blocks of time on my personal calendar for things like “reading” and “game night” and other specific hobby activities, and those things are sacrosanct. Yes, that means sometimes there are things left undone, but if I’m actually productive during other parts of my life, there’s nothing too important that’s left undone.
Third, during productive times, I obsessively follow my to-do list and try my best to avoid idling. I try to jam as much productivity into the productive times on my schedule as possible. That way, I don’t “feel bad” when I choose leisure or sleep.
Finally, if I do notice myself idling, I don’t beat myself up over it. Instead, I just try to switch to being productive or genuinely restful as immediately as possible. It happens sometimes, but it’s okay.
We Convince Ourselves That the Grass Is Greener
A final problem that I often observe when finding happiness and contentment while keeping spending low is that our minds often seem to want to convince us that the grass is greener on the other side of the fence. In other words, we talk ourselves into believing that our life will be better if only we had a certain thing or were doing a certain thing.
My life would be better if I had this other job. My life would be better if I had this particular item. My life would be better if I went on this trip. It goes on and on.
The problem, of course, is that we’re generally only looking at the upside of the change we’re considering, while we’re looking at both the positives and negatives of the things we have now. When you compare the full picture of one thing to the mere upside of another thing, the other thing always looks magnificent, and when that becomes our dominant train of thought, it leads straight to dissatisfaction and unhappiness with the current state of affairs.
How can we improve our contentment with our current state? My first and most important strategy here is to consider the negatives of a change. If I want something or want to make some big change in my life, what are the downsides of that change? I consciously think about the problems it would entail and bring them intentionally to the forefront.
What this does is it creates a situation where only the truly worthwhile types of change stick around. The idle “I wish I had…” or “I wish I could…” thoughts tend to evaporate very quickly when you start considering the true consequences of it, and when that happens, you actually begin to really appreciate where you’re at.
What about purchases? The thing I’ve found is that if I really consider the drawbacks of the purchase, starting with “that money is gone and can’t be used for anything else,” an awful lot of purchases quickly seem quite silly and useless. (This type of consideration of a purchase is embodied in the “ten second rule” and “thirty day rule” which I’ve mentioned before on Money360.
The other aspect of this is that when a change truly does seem to be a strict improvement, I try my hardest to implement it. I commit to a change and I commit to it hard, trying to turn it into the new normal in my life. This is exactly what I did with my financial turnaround, and then a bit later, it’s exactly what I did with my career change.
As I was working on this post, I described it to Sarah and she laughingly described it as “a guide to thinking frugal.” I don’t think that’s actually a bad description at all.
Most of the strategies on this list are centered around changing the focus of your thinking from the things you want but don’t have to the things in front of you, and if you start doing this while living your ordinary everyday life, the desire to have more and more things becomes less and less.
For me, a heightened appreciation of what I do have and a reduced desire for what I don’t have led directly toward a much easier march down the road to financial success, because I started to realize that I am actually pretty happy with the life I have when I’m spending a lot less than I earn. I hope it’ll work much the same for you.