Your financial happiness

Best financial strategy is to be happy

September 12, 2014

Last week we talked about the critical importance of setting specific, measurable goals when it comes to achieving financial success.  Today, we will talk about an unexpected tool and strategy also proven scientifically to improve your chances of success.

That tool is happiness.  Today we will talk about how you can create it and use it to achieve better financial results. That may sound bizarre, but stick with me.

In the early 1970s, the Partridge Family sang in their insipid theme song, “Come on, get happy.”  Nice ditty, but it lacked authenticity when sung by a bunch of kids who had never suffered.

They didn’t know - as you and I know - the struggle to get from paycheque to paycheque, paying for car repairs, taxes, child care expenses, the soaring cost of gasoline, high interest rates on debts and low interest rates on savings, and all the rest of it.  It’s easy to think if those Partridge kids had really lived, they would’ve sung the blues or downbeat work songs instead.

But, recent science actually suggests that they were onto something.  People who take steps to increase their happiness actually increase their performance at work and in other areas, as a result of happiness

I am going to unscientifically extrapolate those findings and generalize to propose that increasing your level of happiness will also help you make better financial decisions and achieve greater financial success.

First, the facts. 

A book called The Happiness Advantage by (Crown Publishing Group, 2010) was written by Shawn Achor, who spent more than 10 years at Harvard University, researching and lecturing.

His research turns some of our basic assumptions upside down.  While most of us assume we will be happy once we achieve success, his studies instead suggest that taking steps first to improve your happiness will lead to better performance in areas like cognitive function, decision-making, helpful pattern recognition and other factors that will improve your chances of success.

Who’d a thunk it?

And the obvious by-product is that you will be happier along the way.  Bonus.

It turns out that there are specific behaviors you can perform every day that have been proven to increase your level of happiness.  Spoiler alert - if you want to avoid being happier, stop reading now.  I’m about to reveal the “secrets”.

The Happiness Advantage says that if you follow these steps every day for 21 days, you will significantly increase your level of happiness, and that higher level will have a high degree of persistence. 

  1. Every day, write down three things for which you are grateful.  They can be simple and mundane, starting with just getting through another day. Very soon, though, you will get much better at this.
  2. Write down what you accomplished that day in a journal.  Many of us focus on the things we failed to do, and we need to give ourselves credit for what we actually accomplished.
  3. Exercise daily.  If this is new for you, start with 15 minutes of walking and build up by a few minutes each day.
  4. Take 15 minutes a day to sit quietly and just think.  (Some call this meditation, but I don’t want to get all mystic and scare you off.)  Do what you need to do to quiet your mind for that time.
  5. Say “Thank you” at every opportunity.

The book suggests other tools, like first focusing your efforts on small, manageable goals, which will give you the confidence and skills to tackle ever larger ones, and by leveraging your social support network to increase happiness and success.

If you want to get deeper into this, you can also read Mr. Achor’s 2013 book Before Happiness: the Five Hidden Keys to Achieving Success, Spreading Happiness and Sustaining Positive Change.

On the other hand, the shortcut version is a book by Ashley Walker, called Happiness Advantage: 5 Actionable Strategies to Create a Positive Impact the Success.  That will only set you back four dollars for a Kindle edition.

Skeptical?  Sure you are, but I doubt your innate level of cynicism matches mine.  However, either way, what have you got to lose by giving this a try?  It even worked on a crusty old high mileage model like me.

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Dollars and Sense is meant as an introduction to this topic and should not in any way be construed as a replacement for personalized professional advice.

Please consult legal, tax and investment experts for advice on your unique situation.

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David Christianson, BA, CFP, R.F.P., TEP, CIMis a financial planner and advisor with Christianson Wealth Advisors, a Vice President with National Bank Financial Wealth Management, and author of the book Managing the Bull, A No-Nonsense Guide to Personal Finance.