Many of us are worried right now about losing benefits, paying bills or having enough money saved for the future.
So, it might seem tone-deaf that our topic this month is about money and happiness.
However, now is when we need to remember what is truly important: our family, friends, purpose and faith, because life is more than bills and how much is in our bank accounts.
I am not minimizing the struggle right now, but research shows that many people with modest incomes are at least as happy, and sometimes happier, than those with more, and that at some point, there are diminishing returns in terms of happiness and wealth.
I have never been rich, but being around the wealthy and watching their behaviors taught me a lot about how to have a healthy relationship with money.
Living beyond your means
I grew up in an affluent neighborhood, but we were what you could call “house poor.”
My parents stretched to buy into an area with beautiful old homes and close to everything, but it was a financial struggle and a lot of stress every month to make ends meet. I learned that trying to live beyond your means is stressful.
My mom would complain that after a long day at work and more to do at home, she would watch our neighbor, dressed to the nines and not working, drive up while her upstairs and downstairs maids rushed out to take the children and carry the groceries and dry cleaning. I learned that being around people who have more than you can make you resentful.
I remember when my parents took friends out to dinner to thank them for hosting us on their yacht for the day. I watched them grimace and shift in their seats as their friends ordered more and more food and alcohol. I later heard my parents discuss how the dinner had cost our food budget for the month. I learned that trying to keep up with others can be painful and embarrassing.
While working at business management firms on the West Side as a young trust accountant, where some of our clients were indulged celebrities, I was still surrounded by wealth. Meanwhile, I was driving an old compact car (that I parked down the block from the office so no one would see), and living in an apartment with a long commute. However, I enjoyed the work, and that made me happy.
Sometimes my clients would insist that I stay with them in their mansions while we worked on large projects. At first, I thought it sounded like a free vacation, until I realized they just wanted to save on the hotel and have 24-hour access to me without being billed for the hours. It was anything but a vacation.
One of the first things I noticed when staying with wealthy clients was that, no matter how fancy the house was, we still all slept in beds and used toilets. Your bed can only be so big and fluffy, and in one house, I had to use a ladder to reach it. You can have a big, gold-blinged toilet, but it is still a toilet.
In other words, there is only so much you can spend. And everyone, no matter how big or how grand their palace is, has kitchen trash. You have to find the secret hiding place or walk around with it. Finally, it did not matter how big and fancy their house was; the clients would invariably talk about the neighbor down the street with a larger and grander one.
One of my middle-aged clients, heir to a manufacturing company, married his high school sweetheart, a widow living with her parents. After their fairy-tale wedding, her first purchase was a car. The first purchase made with a financial windfall is almost always one or more cars.
The next step with new wealth is to fix everything wrong with your “poor” life.
For her, self-improvement meant extensive plastic surgery, dental work and a wardrobe, all done very quickly, as if there was a deadline. She bought and decorated their Barbie dream house in record time, had buyer’s remorse, then did some bucket-list traveling, and within two years, she was bored and agitated.
“I guess it’s not paradise if you live it every day,” she said.
While we don’t have to feel sorry for her, perhaps, as a former teacher and artist, she had a higher purpose in life than just spending.
Something else we noticed with many of our clients is that, even if their home was 10,000 square feet,they actually lived in only about 600 square feet of it. A few clients even put their bedroom on the first floor, next to the TV room and kitchen, effectively making themselves an apartment.
Sometimes I stayed on a wing or floor no one had slept in for some time. The kids and friends they thought would visit never came. If you talked to them about it, they would reminisce about when they started out, and about the closeness they shared with their spouse and young kids in their first home. They missed the time when they had less.
Happy to be home
The last time we stayed with a client in a stunning home with sweeping views of the Pacific, my husband and I decided it would be the last time we would stay with a client.
I spent most of the time cleaning and worrying because it felt strange not to do something.
When my husband and I would pass each other in the hallway, we would ask each other things like, “Did you see the squeegee in the shower? Did you use it?”
The client had repeatedly complained that guests would take their charging cords, so my husband brought a handful and left them on the nightstand, just in case. The dinner we bought to thank them cost $700, so we could have had a restful weekend at a hotel instead.
On the drive home, we were silent from exhaustion. We dropped our bags just inside the door, collapsed on our shabby loveseat, and held hands, so happy to be home. Then my husband said, “I think I’ll send them a picture of our view… of the cul-de-sac.”
The cul-de-sac is our Wonder Years-style block of late 1950s starter homes. We live with the tight galley kitchens and tiny bedrooms because we like it here. Most of our neighbors bought decades ago, and almost no one leaves.
There are good reasons to stay. The monthly cost is affordable. The houses are all about the same (only two floor plans), so there is no keeping up with the Joneses.
Since the houses are small, they require little maintenance. Everyone is comfortable and safe.
As a bonus, we have award-winning block parties and even a band. We live amongst friends. We often sit out front with our coffee, watching the birds and squirrels as neighbors pull up a chair to chat. With all that, who needs a palace?
Michelle C. Herting is a CPA, accredited in business valuations, and an accredited estate planner specializing in succession planning and estate, gift, and trust taxes.