IE 11 is not supported. For an optimal experience visit our site on another browser.

‘You Don’t Have To Be Rich’

In her new book, Jean Chatzky explores what makes a happy, successful life and how much money you really need to have one.
/ Source:

Do you have to be rich to be happy? Would being richer make you happier? Does money buy happiness? Not the sort of questions you usually hear from a personal finance expert, especially one as popular and respected as Jean Chatzky, of Money magazine, the “Today” show, and But in these difficult times, when many of her fans are struggling with job insecurity, declining investments, and fear of the future, Chatzky decided to write a different kind of personal finance book. Instead of just explaining what to do with your 401(k), she set out to explore the big picture: what makes a happy, successful life and how much money you really need to have one. Read an excerpt of “You Don’t Have to Be Rich,” below to learn that your money doesn’t have to be a source of stress, but can instead be the path to comfort and financial freedom it was always meant to be.


IT’S TIME TO take back our lives. And in order to do that we need to take back our money. Not just the manner in which we manage it by learning, once again, to live within our means, however modest or expansive those means happen to be. We need to regain our financial power if we feel we’ve ceded it. Or to grab hold of that power, even if we’ve never paid much attention before. And we need to do it in a way that will allow us to feel good — not compromised, not guilty, not second-rate — but good, happy, smart, and confident about our choices.

But how? If you’ve watched me on television or read my columns, you know I’m all about the tactical and practical. I look for real solutions to all sorts of money problems, and then I want to see data that prove to me that the solutions work.

Where money and happiness were concerned, useful data didn’t exist. There was a bounty of research showing that, indeed, money wasn’t the key to lifetime happiness (although it did have a role to play). But when I started looking for lists of behaviors and habits, things you could actually alter in your lives that would positively impact your relationship with money, I found nothing.

So I went looking for those answers myself. At the end of 2002, with the help and support of Money magazine, extensive proprietary research was conducted for this book by RoperASW. The goal was to figure out, first, what influence money has over an individual’s overall happiness; second, what habits, attitudes, behaviors, and knowledge separate those people who are satisfied with their financial lives from those who are not; and third, what effect changing those habits, attitudes, behaviors, and knowledge might have on a person’s life.

The results were staggering. Of course, money plays a role in the happiness equation. 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. Moreover, money can be a bigger cause of unhappiness than many other factors in your life. Let me say that again. Even when it’s working in your favor, money can’t make you completely happy. But it can - without a doubt - make you miserable.

Our study examined nine factors that contribute to a person’s general happiness: things like a marriage or other important personal relationship, good friends, children, job, and lifestyle. Of all of these, money, it turns out, is the biggest contributing factor to a person’s unhappiness. It is the factor we worry most about — the one we feel is furthest from our control.

Then we dug deeper. We delved into the lives of people for whom money was not a roadblock to happiness. These were people who said they felt in control of their money, who didn’t spend nights staring at the ceiling worrying about it. And we were able to isolate their habits, attitudes, and behaviors.

The links between those people — the habits, attitudes, and behaviors that separate them from those who are unhappy — form the basis of an astounding new way to manage your money. Follow the prescription, adopt the habits, by which these people live and it will lead you directly to a happier life. You will reduce money-related stress. You will start making financial decisions that truly make you happy — and that aren’t based on someone else’s definition of satisfaction.

And I have the research to prove: It’s not about how much you have. You don’t have to be a Rockefeller. You don’t even have to be rich.

That’s right. Whether you pull in $50,000 a year or $500,000 a year, you have the same shot at achieving this sort of financial satisfaction.

In fact, adopting these habits, my research shows, is worth an extra $25,000 a year. Picture this. You have two American families. The first earns less than $50,000 a year but is in control of their money.

They’re not anal with a capital A, but they’ve adopted a handful of the good habits I’ll outline for you in the pages that follow. The second family earns at least 50 percent more — upward of $75,000 a year — but they’re less in control. They’re not financial fiascoes across the board, but they’ve picked up a couple of not-so-good habits.

Who’s happier with their finances? Neither one. Roughly six out of ten families like the first will say they’re financially happy. Roughly six out of ten families like the second will say they’re financially happy. Good money management - taking ownership of your money rather than letting it ride roughshod over you - makes the difference. In other words, adopting good money management habits rather than poor ones is like earning another $25,000 a year.

What are you waiting for?


Thou shalt get “pretty” well organized.

Don’t raise your eyebrows at me. I want you to understand you have a little wiggle room here. You don’t have to hire a professional organizer or spend a mint at the Container Store. You just have to come up with some sort of system that you understand, so that if you have to put your fingers on an important piece of paper, you can do it quickly and without hassle. That’s the key. People who say they are “pretty well organized and can find what [they] need quickly” are happier than those who aren’t and those who can’t. Why is that? I’d argue it’s because they’re not stymied on a regular basis by frustrating losses-losses of objects, losses of hours of their time looking for those objects. They’re not consumed by the banal tasks of administration. They can focus on the good stuff.

Thou shalt pay bills as they come in rather than all at once.

You wouldn’t think this would make a difference, as long as your bills get paid before they’re overdue. But it does! People who pay their bills as they come in rather than stockpiling them to do once a month are happier. Why? My theory is that sitting down to pay the dozen or so bills all at once is pure drudgery. It eats up a chunk of time that you’d rather spend doing just about anything else. Moreover, watching that large sum of money fly out of your hands can be an emotional drain. Do it in bits and pieces, however, and it’s far less overwhelming in terms of time - and your bottom line. Make it easy on yourself. Set up a bill payment center (which can be as simple as an in-and-out box) where you open the mail. Equip it with stamps, pens, your checkbook, and any other accoutrements you need, and get yourself in the habit of opening the bill, writing the check, stamping the envelope, putting the envelope in the stack of mail that goes out tomorrow, and recording the transaction in your checkbook. The bill itself goes back in the original envelope and into a stack to be filed. That you can do once a month.

Thou shalt keep tabs on your cash.

If you feel that money evaporates out of your wallet and you don’t know where it goes, you’re more likely to be unhappy. What’s the best way to prevent this from happening? Personally, I save receipts. But you can also start the day with a certain amount of cash ($20 or $40) and try to live within those limits. You can put yourself on a regular schedule of ATM withdrawals, take out a certain amount of cash for an entire week, and put only a fraction of it in your wallet each day. You can route all transactions through a single checking account, rather than pay some bills out of one account and some bills out of others. And you can balance that checkbook regularly; our research shows that people who do are happier. That will help you stay focused on where all your money is going.

Excerpted from “You Don’t Have to Be Rich: Comfort, Happiness, and Financial Security on Your Own Terms” by Jean Chatzky. Copyright © 2003 by Jean Chatzky. Published by Portfolio books. All rights reserved. No part of this excerpt can be used without permission of the publishers. For more financial advice, visit Jean Chatzky’s Web site at: