THE COLOR OF MONEY
Does money buy happiness? Well, it's like a down payment

By Michelle Singletary

WASHINGTON — Many people — if they're candid — will say they'd be happier if they just had more money.

But does a bigger bank account guarantee your happiness?

To help you figure out if you can be financially happy at almost any income level, I recommend "You Don't Have to Be Rich: Comfort, Happiness, and Financial Security on Your Own Terms," by Jean Chatzky (Portfolio, $23.95).

Chatzky, with the help of Money magazine and RoperASW, took a survey in 2002 of more than 1,500 people to find out if people have to be Rockefeller-rich to be happy.

Chatzky, the financial editor for NBC's "Today" show and a columnist for Money, says the goal of the research was twofold. First, she wanted to figure out what influence money has over an individual's overall happiness. And, second, what are the habits, attitudes and behaviors of the financially happy folks?

"Of course, money plays a role in the happiness equation," Chatzky writes. "To try to deny that link would be disingenuous, not to mention unbelievable. But it's not as strong a link — as big a contributing factor — in your happiness as you might think."

For example, 74 percent of those earning less than $25,000 a year said that, overall, they were somewhat or very happy with their lives.

There is a 10 percentage point jump in the happiness factor between people earning $25,000 and $50,000.

But after $50,000, the overall happiness of respondents did not increase that much. The survey showed that 84 percent of people earning $50,000 or more were happy with their friendships, standard of living, marriage, children and appearance. Eighty-six percent of people earning $100,000 reported they were satisfied with their lives.

Chatzky concludes that income, to the extent it makes you comfortable, does contribute to your happiness. But once you've achieved basic comforts, your happiness has to come from another source.

To reach a certain happiness with your finances, you do have to adopt the habits of the financially satisfied. Those habits, according to Chatzky, include:

• Balancing your checkbook every month.
• Organizing your financial records.

How many times have you paid late fees because you forgot to open a bill or stuffed it under a pile of papers?

• Paying your bills when they come in, rather than once a month.
• Keeping track of where your money is going.

For example, you wouldn't often say: "I have no idea where that $50 I just took out of the ATM went."

One of the best things about the book is that you get to answer the same survey questions asked during Chatzky's research. The questions in the book help you think about how you handle money.

Chatzky finishes the book with the commandment: "Thou shalt try not to be consumed with a desire for more."

"This book is not a missive on the simplification movement or a diatribe on paring down," Chatzky says. "People ... who over want tend to believe that money equals happiness. And my research shows that they are the very same people for whom money gets in the way of ever achieving the happiness they seek."

She further writes: "Remind yourself that wanting more doesn't breed contentment, it breeds wanting."

Hopefully, you'll realize from reading this book that living a rich life is largely a state of mind — not what's on your bank statement.

Write to Michelle Singletary at Washington Post Writer's Group, 1150 15th St. NW, Washington, DC 20071.