Consumerism Commentary and the articles I write here have changed since I started writing about personal finance in 2003. I’ve personally gone through four financial phases over the thirteen years or so, and because I draw much of my writing from personal experiences, any readers who have been around over the past decade might have noticed the changes and how they’ve affected my perspective.
Phase 1. Financial ignorance. It was easier for me to close my eyes to the financial trouble I was getting myself into. I’m still pleased that I pursued a living I was passionate about through and after college without regard to possibility of an insecure financial future, but there came a point where I needed to change my declining situation.
Phase 2. Personal and financial stability and growth. I began learning about managing my money, spending less than I was earning, and growing my wealth. In this phase, I began a personal blog, Consumerism Commentary, to document my progress, keep myself accountable, and expand my knowledge. In a new job and a new living situation, I was able to save money from every pay check. Before long, I was on my way to getting out of debt and building a solid emergency fund. I started saving for retirement for the first time.
Phase 3. Approaching financial independence. In Phase 2, I was concerned about my ability to negotiate a decent raise every year. There’s nothing more annoying than having to put up with the corporate environment where you constantly need to fight for getting the bonus you deserve.
I was starting to build my own business in Phase 3, and when I had more control over my own destiny, the pettiness of corporate life stopped mattering as much. By the time I quit my day job, I had financial independence in my sights.
Phase 4. Achieving financial independence. The point at which finances are no longer a constraint brings its own problems. The need for financial stability can instill a drive for success, and financial independence eliminates that type of desperation. My financial needs have never been great in the first place, but now I struggle with taking some of my other passion projects to the next step.
Framing one’s life phases by changes in one’s relationship with money is only one way to look at life. It’s worthwhile to look at something more core to humanity’s existence than something as material as money. I’ve always said that net worth is not a real goal, that money is only valuable in terms of what it can do for you ability to live how you want. If your only goal is to retire at age 60 with $3 million — or to retire at age 35 with $10 million — you’re missing the point of financial independence. Until you can answer the question, “Why?” you have to give your life more thought.
This is a publication where the focus is on money. It makes sense for me to write articles that frame life in financial terms. But it’s good to go occasionally beyond the confines of money and look at life in a broader context. One philosophical theory I hear often is that life is not about the pursuit of money, it’s about the pursuit of happiness. Humans want to increase their wealth because financial independence removes barriers to living life in a way that evokes happiness.
Scientists have studied money and happiness to look for correlation and to determine if one has any effect on the other. This article from Forbes gives a summary of many of the major studies pertaining to money and happiness; there doesn’t seem to be much agreement. Not mentioned in the article is the famous study — at least among financial experts — that happiness is correlated to your financial standing among peers when measured by income. That is, you’re happier if you earn $50,000 while your cohorts earn $30,000 than you would be if you earned $100,000 while your friends and colleagues earn $150,000.
I have no reason to doubt the study. For most people, external factors influence happiness. Those external factors can be one’s standing among peers financial and otherwise, one’s freedom to make decisions in a job, and one’s family life that fits a personal definition of a family. Happiness can take form as just a lack of frustration or disappointment.
In those cases, happiness is an internal satisfaction influenced by external factors. But what most people who where included in this study may not know is that happiness is a choice. You can choose to be happy, choose how you react to any situation, but if you don’t choose to be happy, you’re choosing to be something other than happy. And you can choose to be happy regardless of external factors.
Choosing to be happy is not the same as choosing to be satisfied with your life to the point of not looking for improvement or change. If you look at happiness as an ultimate goal, you might think that you can’t be happy until your life is exactly how you want it to be, or you might think that if you’re happy, you would have no need to allow your life to change or no need to direct your life towards improvement. But because happiness is simply a choice you make on an ongoing basis, it cannot be an ultimate goal.
Unfortunately, this idea of choosing happiness has been co-opted by pop psychologists, self-help gurus, empowerment philosophers, and feel-good motivational speakers. It results in silly tips like “Be the best YOU you can be” (here) and “Count your blessings” (here). Read this stuff if it helps, but underneath this kind of brainwashing is the simple truth that you don’t need to wait for happiness to arrive some time in the future when your life lives up to your expectations.
Choosing happiness isn’t always easy. If you’re living in a difficult situation — even worse, an abusive situation — I am not saying that you should automatically be able to be happy. There are certainly some limits to how happy you can feel in your life at any one moment, and I think the pop psychology approach to choosing happiness often forgets this reality. And choosing happiness doesn’t mean remaining ignorant of trouble ahead; during my first financial phase, financial ignorance, I chose happy by ignoring my problems. But deep down I knew I was in trouble, so I wasn’t very happy, anyway.
The point is to choose the best goals. Money isn’t a goal because it’s just a tool to let you achieve real goals that pertain to your life and the world around you at a deeper level. Happiness isn’t a goal because you control your level of happiness simply by choosing to change it.
If your long-term goal is to find happiness in your life, take a look around you and ask yourself why you aren’t happy now. Take happiness out of the goal equation and determine the specific things you’d like to do or experience and make them your goals. Then, as you progress towards those goals, you can be happy because you know you’re on the right path — or at least on a path.
Read the obituary for the psychiatrist who introduced “choice theory” to a greater audience, William Glasser.