Have you ever wondered how your life might be different if you had All The Money In The World? In her new book by that same name, Laura Vanderkam turns that question on its head. Instead, Laura, who is also the critically-acclaimed author of 168 Hours: You Have More Time Than You Think, and a member of USA Today's Board of Contributors asks...
"What do the happiest people in the world know about money?"
I love this question because while only 400 people can end up on the Forbes 400 list, there is no limit to how many of us can use money more wisely to increase our personal happiness. Laura's book is filled with insights about ways in which you can shift your thinking about -- and use of -- money to add more joy to your life.
This issue of how to find financial security and serenity in a post-2008 economy is one I've been thinking about a lot lately as I am developing my new MoneyZen methodology. So, I was excited when Laura agreed to answer five questions that can help each of use redefine our relationship with money to one that maximizes our personal priorities and interests.
Manisha: With the relative prosperity of the U.S., why do so many of us experience a sense of lack?
Laura: This sense of lack stems from two sources. The first is choosing a problematic reference group. If you compare yourself to the people you see on TV -- that is, if you try to keep up with the Kardashians and their ilk -- you can feel dissatisfied. But if you compare yourself to the billions of people on this planet who live on less than $2 a day, you'll feel indescribably rich. You can choose either reference group, but one will make you feel much more blessed. Second, even if we realize that we do have enough, we have a tendency to overspend on big ticket items that we get used to over time: the house, the car, diamond engagement rings. Spending less on these categories frees up cash to splurge on little indulgences that will make us happy every time: going out with friends, vacations, charity, even something like a painting class.
Manisha: What kind of mindset shift needs to happen for us to relate to money from a place of joy?
Laura: We need to recognize that money is just a means of exchange. Stripped of all the drama, it is simply a tool. Since it is a tool, we can use it to help us build the lives we want. When you look at it that way, you realize that money is powerful, but it's most powerful when you put it to use to build a better life for you and the people you care about.
Manisha: What is the significance of pursuing your passions in creating a joyful relationship to money?
Laura: I think there is significance on both the spending side and the earning side. On the spending side, if you read too many frugality blogs, you start to forget that money is there to be used. I think people spend money most wisely when they figure out exactly what makes them happy -- trips to an art museum, for instance, or maybe gourmet food -- and then spend a lot on those categories, and as little as possible on other things. On the earning side, being in the right job can definitely give you a joyful relationship with money.
Manisha: How do you relate to money in ways that are personally meaningful?
Laura: I've learned that spending money in a few ways is guaranteed to bring me happiness. First, I spend on my social network. Throwing parties, going out with friends for lunch, or donating to organizations I volunteer with all give a big happiness bang for my buck. Second, I spend on experiences. Travel is worth doing right. And finally, I spend to buy myself time. We all have 168 hours a week, and all the money in the world can't buy us a second more, but money can buy back time from chores to do other things.
This post originally appeared at ManishaThakor.com.