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The joy of financial security

By Judy Martel · Bankrate.com
Monday, July 28, 2014
Posted: 6 am ET

We've all heard that money can't buy happiness, so while money in itself might prove fairly worthless in this endeavor, financial security really can give us the peace of mind that leads to happiness. And that sense of security doesn't require a fortune to sustain it; it's more about the belief that you have a handle on your finances and are prepared for the future.

It's not just about the money

Donna Skeels Cygan

Donna Skeels Cygan, CFP

Donna Skeels Cygan, author of "The Joy of Financial Security" and president of Sage Future Financial in Albuquerque, New Mexico, has done extensive research on the subject of money and happiness. "What I concluded is that money doesn't buy happiness, yet it most definitely impacts our happiness."

She describes most of her affluent clients as "the millionaire next-door, with solid middle income values." While many are more frugal than they need to be, given their net worth, those who manage and spend money wisely are happier. "Those who have struggled with finances for a variety of reasons were less happy."

While some of her insights may seem obvious at first, there is an important distinction between just having piles of cash and actually feeling in control of your finances to the degree that you can live the life you desire. After all, there is no shortage of stories of multimillionaires who overspent or overleveraged and ended up in the poorhouse. What they lacked was the bigger strategy that would give them better financial control over their assets.

The wish lists

It's easier to achieve control over your personal life and finances if you write down your objectives. In her book, Cygan details how to develop two wish lists -- one for your personal life and one for finances. She tells people to try to achieve one item on each list per month and notes that small changes can have a big impact.

The lists also force us to focus on our personal and financial goals and take action at least once a month. Sometimes the flurry of day-to-day chores and checklists cause us to lose sight of the overall strategy. "Our society is working far too hard and it's all stressful and damaging and needs to change," Cygan says.

"I speak from experience because I'm a workaholic in the extreme," she adds. "Growing up in my family, work was honored." Because she sees her drive as sometimes overtaking the possibility for joy in the rest of her personal life, Cygan's personal list addresses the desire to spend more time with family and do the activities that make her happy, such as hiking and running.

Your lists are all about you

Cygan's personal list includes items (in no particular order) such as: read for enjoyment, spend more time with her husband and daughters, slow down and learn to smell the roses, run or walk a 10-K race and plan a hiking vacation.

On her financial list: Save 20 percent of her income, develop and implement an asset allocation strategy she can live with through thick and thin, pay credit card balances each month, buy mutual funds with low expenses, review her estate planning documents and work in a career she loves.

The lists will reflect your personal goals for achieving the financial security and lifestyle that will lead to happiness. The number of items on each list is up to you. By keeping the big picture in mind, you'll recognize the joy in each moment, Cygan says. "Researchers used to look at income as an indicator of happiness. But what they're finding is that the biggest indicator is financial security for the long term."

Want to manage your financial future through proper investment strategies? Bankrate's asset allocation calculator helps get you started.

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July 30, 2014 at 6:54 am

" What she is trying to say" is your personal lifestyle" If you happen to be "" One of the lucky one's in life that make a 6 figure salary...LIVE within you means' DON'T over spend" Paid off any bill that comes in the mail...Start by paying off credit card bill's...than work on paying off the mortgage. Provided your mortgage is not out outrageous..! Unwise downsize to a small home"",.Once you do that," start in investing you money' in good small dividend paying stock fund" like close-end-funds".
Let the dividends roll over back into the stock funds..Like compounding interest's. ! " DON"T LIVE LIKE EVERONE Else " !!!
""" Warren Buffet""" Lives a every simply life"" a modest lifestyle"" he re-invest all his billions of dollars back to his company and his personal stock portfolio of dividend stock's.."
HE DOESN"T run our and buy'' 4 million dollar Lamborghini""!!!
If you don't believe me" what I'm writing here" Look it up"
Also'' read the book ,,The millionaire next door" by Thomas j Stanley .."

July 29, 2014 at 8:01 pm

Money won't buy you happiness... it just let's you choose your own misery!!

July 29, 2014 at 1:20 pm

Tough to save 20% of your income when 100% of it doesn't cover even the basic expenses. 4 years of college and 2 years tech school and working for a major company. So much for the American dream.

July 29, 2014 at 1:16 pm

There is one thing money can`t` buy. its poverty!

You need a written plan. You need to see where your dollars are going. without directions we would all continue to travel in a circle.
Your finances are no different.know your expenses and income before the month begins.

July 29, 2014 at 8:56 am

I cringe when I hear this statement.
Sure - Greed can't buy happiness.

Like many others the CRASH of 2008 let me to many sleepless nights
worried about the mortgage among other bills.

So far I have made it meet but it sure has taken its toll on my physical and mental health.

I drained all of my savings and of my 401k.

Sure as heck would have made life easier and less stressful.

July 29, 2014 at 8:32 am

"money can't buy happiness"
Poverty sure won't

July 28, 2014 at 11:09 pm

It IS true that money cannot buy happiness; but it can buy a good time and it can alleviate the tensions that arise with financial hardship. It is important that we learn and identify the difference between happiness and a good time.

July 28, 2014 at 9:15 pm

Anyone who says money cant buy happiness have never spent any significant time without it.