…And another thing

In working toward happiness, one key process is to gain more control over the major factors affecting your life. Money’s a big one. It’s easy to measure how much you have. It’s harder to measure how much you should have, but let’s give it a shot. [By the way - I am no expert. These are my opinions. Use at your own risk.]

Before you do anything else: Put at least six months of living expenses into a secure, easily accessible account. (If someone else also depends on your income, make that 12 months.) By secure, I mean an FDIC insured bank account, or something else with a real guarantee. By accessible, I mean that you can get to it immediately, either with an ATM card, in person, or by check. This is your emergency money. Don’t worry about the interest rate – all you care about is that it will be there when you need it.

Even during good times, it pays to think about what happens when times are hard. Injuries and illness, clients defaulting, layoffs, sudden damage to your home or car…these things do happen. What would you do if you really had zero income? Your emergency fund can make the difference between a tough time and a real disaster, so make it a priority. If you aren’t putting money aside for it, start now. Find it hard to save? Look closely at where your money is going. Low resources make it even more important to have an emergency fund. Building one may mean cutting out meals at restaurants or foregoing a vacation, but you will never regret having that margin of safety. What’s more, it will multiply your control over money. Right away, adding regularly to your fund means that you’re asserting control. Then, hitting your fund target gives you backup – and options – for when things get tough.

You can’t control what you don’t measure. It’s a great if somewhat sobering practice to figure what it really costs you to live. Count up, as closely as you can, what you must have every month – the rent, utilities, clothes and groceries level expenses. Add in mandatory payments, such as loans, health insurance, car insurance and credit card debt. Then, add up those other things that have somehow become almost necessities: meals at restaurants, entertainment, donations, gifts to friends, vacations, dry cleaning…and bar tabs. It all adds up to a surprisingly large sum. Here’s a key point: pay yourself first. Before you pay the first bill, save some portion, even if it’s a small part, of what you make. You won’t be sorry.

Many people are using credit cards to spend more than they make. We feel entitled to our little luxuries, especially when everyone we know seems to be doing the same thing. It is very difficult to turn down a night out with friends just because the checkbook is bare. But in my opinion, taking on debt to consume more is a terrible idea. For one thing, the interest rates are very high – you would be very happy to get the kind of return on your money that the bank gets. More insidiously, credit card debt takes away our control because it is so easy, and the reckoning is so detached from the things we’ve bought. The more meals, vacations, and haircuts we buy with credit cards, the more it becomes normal, and the larger the high-interest balance becomes.

Adding to your debt just to consume reduces your control over money – the opposite of what we’re looking for. It is almost certain to make you less happy, not more. Paying off your credit cards has a very high return – getting rid of debt with an 18% interest rate is like earning 18% on your money! If you have credit cards, check the interest rate – you will probably find that paying them off is well worth the effort. When buying fewer things means having less debt, you are really giving to yourself instead of to the bank.

Not all debt is bad, of course. There are three reasons to borrow, in my opinion. First, to pay for an education that you couldn’t otherwise get; second, to buy a house; third, to start or support a business. Each of these has a reasonable chance of helping you in a long-run way, unlike the long-forgotten meals and toys we just had to have.

We’re fascinated with money. Look at all the slang terms for it. Although it can’t buy happiness, we do need it. By building an emergency fund, paying yourself first, and paying off the credit cards, you can start making sure that this element of your happiness is under your control.

Earlier, I said that health is on the list of things that make you happy. (If you have serious problems, get help from a professional. That’s not me.)

First, ask yourself, “What result do I want?” (I am always amazed at how often people don’t do this.)

You might say that you want to:

• Be able to lift X weight Y times
• Be able to walk or run X miles in Y time
• Have such and such a cholesterol level, blood sugar, or weight

…Or many other measures or qualities. You might be fine with your physical health but you don’t want to worry as much about [you name it], or perhaps you’d like to handle anger better. Possibly you think in terms of how far you have progressed with yoga.

The point is: you need goals. You need to define a state you want to achieve. Otherwise you won’t know where you are and you will feel bad about it. Setting goals is therapeutic in itself – you aren’t taking on the whole universe anymore.

Be reasonable. Telling yourself you have to run a 10 mile race in a couple of months when you haven’t walked more than a few blocks at a time for 5 years is setting yourself up to fail.

Be persistent. Those who succeed are those who keep trying. If one method is not working for you, try something else. Just because meditating helps your best friend relax doesn’t mean it’s for you. Don’t give up.

Compare yourself to you, not to other people. There is always someone who can run faster, lose more weight, be more one with the all. Measure your progress against your own goals.

You may like joining with others in working toward your goals. Sharing your progress can keep you on track and give you a reason not to skip a yoga class or eat half the key lime pie at a sitting. Don’t worry if others appear to make more progress – your movement toward your own goals is what counts. And if others compare themselves unfavorably to you, gently remind them of this.

Some can take inspiration from the example of others – and there are certainly many inspiring people. If someone’s success, perhaps against great odds, gets you going, that’s wonderful! Use that example to your advantage!

For various reasons, though, not everyone works that way. Some might look at a success story and find it overwhelming, thinking, “I could never do anything like that.” Whether or not you are encouraged by the success of other people, take this one thing from their experience: They started. They persisted. And you can do that much too.

What does it take to make you happy? Ask anyone you like. Most will respond with something like “A million dollars” or “A new job.” Some, after some thought, might say, “A family.” Some, of course, have no idea.

You need to focus on what matters; otherwise, you waste a lot of time. Below, you’ll see a list of items on which I would tell you to focus. The items are open to interpretation, so later on, I’ll provide some specifics. Note: This is not engineering. You don’t need extreme specificity.

Work toward having:
1. Health, physical and mental
2. Enough money to have all the food, clothing, shelter and health care you need, as well as some luxuries
3. Friends: a few very close and some less so
4. Interesting, meaningful work
5. Something you enjoy doing that is not your work
6. A committed relationship with another person
7. Peace of mind concerning your relationship with your family
8. Peace of mind concerning your relationship with religion or religious questions

In later posts, I’ll expand on these areas and give you some ways to define each one more closely. You may find overlap or conflicts – for example, your work may or may not be interesting and meaningful. You still need the money.