60-Second Guide to the Life-Money Balance

For status reports on wealth, we ask an economist. For check-ups on our mental well-being, we see a shrink. And for an answer to that $64,000 question — “How much money do I need to be happy?” — we turn to behavioral economists, who confirm what we already know: Surprise! Money doesn’t buy happiness!

But let’s be honest: Raises, windfalls, and new gadgets don’t exactly make us miserable, either. So what’s the key to finding that life-money balance? Let’s review the findings of folks who actually study this stuff in a one-minute crash therapy session:

0:60: Make “live rich,” not “get rich,” your life purpose. Besides being just plain crass, “get rich” as a life purpose is really not something to aspire to. (Though “make you rich” will score you major points in that job interview.) In fact, studies show that the pursuit of money as a primary goal has negative mental health consequences. Says Laura Rowley, author of Money & Happiness: “You have lower self-esteem, are more likely to be depressed, and have more trouble in your relationships.”

That said, all thoughts of money aren’t bad for your mental health. A little worrying may be just what the doctor ordered …

0:51: Don’t dismiss all negative thoughts. Some anxiety about job loss, stock market dips, or real estate crashes is good because it will inspire you to do things to avoid them.

0:43: Calculate the price tag for your “me” time. All financial decisions have an opportunity cost attached — if you invest your IRA money in one stock, that means there’s less to invest in another company’s stock. But lost opportunities aren’t just about the bypassed fiscal opportunities. For a more holistic take on finances, you must consider the larger context of your money-motivated decisions, particularly when it comes to your time. For example, before you accept overtime work, consider the psychic costs (such as lost free time with the family) of the financial pursuit. Context is also key with material purchases, so …

0:35: Be realistic about what you really need. Daniel Gilbert, author of Stumbling on Happiness, found that people are pretty bad at predicting their future enjoyment of something (which explains why I can never finish all the food I pile on my plate at a buffet). The results of our misperceptions can be financially disastrous, particularly when it comes to buying homes, cars, and 42-inch — wait, make that 78-inch — flat-screen TVs. Just remember, your new TV (or car or dress or designer dog) doesn’t need to outshine all the others on the sales floor. It just needs to work well in your home (or garage or office or doghouse).

0:28: Accept that the “buyer’s high” is fleeting. Of course that [fill-in-the-blank thing] is perfect. In fact, it’s exactly what you needed all along, right? Sure. But not for long, says Gilbert. You’re going to fall out of love with that new car (or house, job, vacation, etc.) faster than you think and seek that next “perfect” thing, which you’ll tell yourself is actually what you needed all along.

Stop the cycle and resist trading up. Anticipate any long-term complaints you may have about an item in the future, and instead stretch your satisfaction by splurging (within reason) for amenities that will keep you in “like” with your purchase for a while after your true love fades.

0:23: Seek financial autonomy. Studies show that the self-employed are generally happier than company men and women. You don’t have to quit your day job to reap the psychological benefits of independence. Side work or a cash cushion to fund a sabbatical, for example, may scratch the same spiritual itch.

0:18: Seriously, more money really won’t make you that much happier. Once the basics are covered — things like food, housing, bills and some fun money for a few splurges — more money has only minor and rapidly diminishing effects on happiness, the experts say.

0:07: Ignore the Joneses. H.L. Mencken said that a wealthy man was “one who earns $100 a year more than his wife’s sister’s husband.” Wealthy? Sure. Happy? Probably not. Happy people concentrate on their own successes and don’t compare themselves — their income, their family time — with others, research shows.

If you’re not that big of a person, don’t sweat it. Just put more effort into the things that happy people report truly bring them joy: family and community ties, friendships, and puppies. (OK, I added that last one, but you get the drift.)