More Money Doesn't Always Bring More Happiness

Yahoo Finance shares a fasinating book, "Happy Money: The Science of Smarter Spending," written by two behavioral scientists: Dr. Elizabeth Dunn and Dr. Michael Norton. Within this book are five ways to make you a happier individual in the long run.

1. Buy more experiences and less material items.
"Research shows experiences provide more happiness than material goods in part because experiences are more likely to make us feel connected to others," Dunn and Norton write. With that being said, before you go buy a brand new iPhone, realize that a dinner with friends could bring you more satisfaction than the phone purchase.

2. Direct your focus on buying more time and less on getting more money.
"Wealthier individuals tend to spend more of their time on activities associated with relatively high levels of tension and stress, such as shopping, working, and commuting." It is important to incorporate things that you enjoy doing into your hectic schedule. You will find yourself being much happier if you better balance your work and personal life.

3. Realizing you can be house rich and happiness poor.
Studies have shown that people that buy a bigger house are happier with their house but not happier with their lives. It may be time to rethink such a large purchase if it doesn't contribute to our overall happiness.

4. Overindulgence can make the good things lose their sparkle.
When you have more financial resources available, why not indulge whenever you want? If you had your favorite ice cream cone every single night after dinner, you might just get sick of it! As with bigger material items, over indulgence can make those purchases lose their sparkle. "This is the sad reality of the human experience: The more we're exposed to something, the more its impact diminishes," Dunn and Norton write.

5. Focus more on others and less on yourself.
You will actually feel happier in the process of helping others. "In [a study] of more than 600 Americans, personal spending accounted for the lion's share of most people's budgets," the authors write. "But the amount of money individuals devoted to themselves was unrelated to their overall happiness. What did predict happiness? The amount of money they gave away. The more they invested in others, the happier they were." You might not feel as good as you thought you would after making a monetary donation. The reason is you might not be physically seeing your money be put to use. Make sure to stay in the loop with the organization you are donating to so that you feel more engaged!

10 Dumbest Money Moves

Ever made a big mistake with your money?  Lots of us have.  In a recent article called "My 10 Dumbest Money Moves - And How You Can Avoid Them," Stacy Johnson of MoneyTalkNews discusses ten frequently-made money mistakes and what you can do to avoid making them.  The ten mistakes he describes include:

1) Not having a goal.
2) Not having a spending plan.
3) Attempting to derive self-esteem from possessions.
4) Doing what everyone else is doing.
5) Starting to save large and late rather than small and soon.
6) Paying interest to buy things that drop in value.
7) Turning down free money.
8) Buying a new car.
9) Buying more house than you need or can afford.
10) Not protecting your good credit.

To read the full article, click here.

7 Money Mantras To Live By

Check out this new article from the Oprah.com website called "The 7 Money Mantras Experts Live By".  Here are seven tips that can help you save hugely over time (click here to read the full article):

Mantra #1:  Manage your finances like you manage your social life.  For example, place bill due dates on your calendar right alongside your social outings.  This serves as a good reminder.

Mantra #2:  Find the bigger "yes."  Set your priorities.  Make spending cuts in areas that matter.

Mantra #3:  You can't out-frugal your way to rich.  "You don't have to eat lobster every night, but you do have to eat."

Mantra #4:  Sober up your spending for free.  Free (general) financial advice is available if you look for it. 

Mantra #5:  Buy more good times than good things.  We typically don't look back and regret the things we didn't purchase.  Look for experiences instead of material things.

Mantra #6:  Don't do anything smart.  If you're feeling jumpy, relax.  Try not to act out of emotion.

Mantra #7:  Wait a day or two... or three.  Before making a purchase, sleep on it.  It will still be available in a day or two and you'll often decide it's something you really don't need. 

The Real Reason You're Broke

Life is expensive no matter what your personal circumstances may be.  But by planning properly and making wise choices with your money, you may avoid financial turmoil.  A fun article was recently written which bluntly suggests several reasons that people become broke:

1. You spend good money on crap.

2. You don’t have a budget.

3. You don’t earn enough.

4. You don’t pay off your debt.

5. You don’t save.

6. You’re clueless about your investments.

Click here to read the full article and see what you can do to avoid putting yourself in a financial blunder. 

Money Rules

In MSN Money's Liz Weston's recent article "9 money rules to live by," she lists nine rules that will help you take control of your spending. And believe it or not, they're fairly simple!

Read the full article.

Why shopping pays

Dan Danford, Founder and Chief Executive Officer of Family Investment Center, answers this week's episode of Money Made Easy.

As a frequent speaker to college students, Danford said he is often asked about spending. The first, and most important, point he stresses is making wise decisions when spending. Most people who suffer from financial hardship tend to have spending issues, he said.

Continuing his series of "back to basics" financial advice, Danford explains "why shopping pays."

Money Made Easy: Financial New Year's Resolutions

In this week's edition of Money Made Easy, Dan Danford answers this financial question from a viewer: What are some New Year's resolutions you think we should follow to help improve our finances?

Danford, of Family Investment Center, offers his financial advice on how you can have a better financial situation in 2011.

Debt levels trending down

American Express recently surveyed young couples about their financial lives in their mid-year Spending & Saving Tracker. The Yahoo! Finance business story goes into detail talking about the part of the survey that has to do with how couples manage their money. You can read that story here:

http://finance.yahoo.com/family-home/article/110075/keeping-finances-separate-can-be-costly

But there's also a part of the survey that reports on the level of saving that people are doing. Apparently, 75 percent of those responding to the survey say their level of debt didn't increase during the first six months of 2010. In fact, 38 percent say that their debt actually decreased. This is great news - and exactly where we all need to be headed.

You can read the actual press release here:

http://home3.americanexpress.com/corp/pc/2010/axp_tracker2.asp

Stop Acting Rich: The Paradox Of This Book

By Dan Danford

Review of Stop Acting Rich: And Start Living Like A Real Millionaire.

I’m a big fan of Tom Stanley’s research and books. I first encountered Stanley at a trust conference many years ago, and I’ve read and recommended his books to dozens of clients and prospects. His insights are helpful and entertaining.

His newest book, Stop Acting Rich: And Start Living Like A Real Millionaire, reveals the differences between what we say and what we do. He chronicles the spending patterns of genuinely rich people, and the lifestyles they enjoy. It’s interesting, because there are two groups of people with serious money; the glittering rich (think Donald Trump or Bill Gates) and the millionaires next door. And, as you’d guess, they consume differently.

Spending by the glittering rich, well, glitters. These are the few folks with so much money that spending really doesn’t matter. They own multiple cars, multiple timepieces, and they tend to entertain lavishly. We all know who they are and they set a remarkable standard for living.

Other rich people are remarkable for differing reasons. As Stanley has recorded previously, they stand out for their modesty and good sense. These millionaires drive Toyotas, wear Seiko watches, and surround themselves with value-oriented merchandise. We know who these neighbors are, too, but we probably don’t realize how financially successful they truly are. They set a different kind of standard.

Here’s the paradox of this book. Almost everyone else (and that’s a huge chunk of our society) dwells in yet another culture. This is the culture of false wealth. Where looking rich is more important than being rich. It’s the world of luxury goods sold to high-income buyers. But, sadly, that spending pattern yields no genuine wealth. The simple act of buying those goods, by itself, is financially counterproductive.

These are residents of mini-mansion neighborhoods. And owners of luxury automobiles and Rolex watches. They send their children to private schools and belong to expensive country clubs. They buy Brooks Brothers suits and shop at exclusive department stores. They are glittering rich wannabes, and they spend most of their income on a prestige lifestyle. There’s nothing left for saving.

The depressing truth is this book won’t change much. Most of us would rather look rich than be rich. We like those luxury goods and that luxury lifestyle, even if we can’t afford them. We can see how sensible living might bring stability and success. We know Tom’s right, but we don’t want to live in sensible neighborhoods or drive sensible cars or wear sensible clothes.

That’s the paradox of Stop Acting Rich. We don’t want to.

Want to buy it? Purchase it from your local bookstore or from Amazon by clicking here.