The LIFE Value of Money

For anyone with a bank account, IRA or portfolio – the term “time value of money” should not be a foreign one. Simply put, we all want to know how much a current stream of money will be worth in the future, if we choose not to spend it in the present.

But what about the life value of money…?

Studies are done every day to measure the happiness quotient of those with wealth, those who have what they want versus those who want what they have, etc., etc.

Money can buy happiness — not in the form of Louis Vuitton handbags, Ferraris, nor vacations in Aspen — but rather by the security and freedom of choice that having financial means can bring. Sure, you may choose to spend your money on an expensive vacation or handbag – but when most people think about having all the money they want, for the most part, they’re thinking about having all the money they need. If you are financially comfortable, you’re comfortable making decisions that involve money. In turn, your stress level is decreased. If you do not have to worry about how much the car repairs are going to cost, how much your child’s school clothes will cost, how much you have left over for Christmas gifts….your anxieties decrease and your sense of personal control increases.

And, therein lies the correlation between money and happiness:

Financial Security (”money”) = Sense of Control = Fewer Worries = Greater Happiness.

But where do we draw the line between what we are paid versus the price we are paying? It can be argued that college students and seasoned professionals alike, who make career and life decisions based on how much money they will make, are doing so out of fear rather than personal goals. “I want to be rich and successful” = “I want to be secure and worry-free.”

So, the freedom and fiduciary wealth that may come with a higher income can, in fact, “buy” happiness; however, one may have to give up other sources of happiness to achieve said wealth.

TANSTAAFL *

There ain’t no such thing as a free lunch!

In order to get one thing, often times we must give up another. It’s an ironic perspective on the hard working – when the money we earn does not earn us the ability to enjoy life, relaxation and free time – because we are so consumed with earning it.

I have seen both sides of the equation – earning so much I did not know where to put it, yet losing part of my sanity in the process versus operating on a shoestring budget while literally having time to stop and smell the roses and enjoy each moment. Which alternative is better? I do not have that exact answer, but what I do know is that the only thing we can truly “buy” — money or not — is the time and balanced perspective to enjoy life and trust that our needs will be met.

Wishing You Success,
Natalya

* Author’s note: despite a Masters degree in Economics and tens of thousands of dollars spent on that degree, I learned more about life from that one term (’TANSTAAFL’) in an Economics textbook than I did about forecasting economic trends. Sorry Dad.