All the Money in the World

All the Money in the World: What the Happiest People Know about Getting and Spending by Laura Vanderkam.

We’re told that money can’t buy happiness – but really, we all know that it can, Vanderkam (168 Hours) says. Instead of looking at money as evil or a burden, she asks us to look at money as a tool, and how to leverage it to best further our happiness. Her first chapter looks at weddings, specifically the $27,800 dollars that theknot.com now says is average for American couples. Most married couples with young children say they can’t afford to have regular date nights, yet the $5000 (gasp!) that’s average for rings could buy $50 date nights for a very long time. Research shows that lots of small happy events provide more happiness overall than one giant event, so why not cut back on the wedding and save more for the marriage? And even if it’s too late for that particular example to be useful for you as it is for me, in general, Vanderkam advocates looking at how to spend your money closely, neither spending blindly nor swallowing standard financial advice whole. She looks at getting and saving, spending, and sharing in large sections. For getting, she says, why do so many people rail against the latte as the cause of all poverty? Her lattes make her happy and more pleasant to be around every day. Instead, look at earning more money and cutting the large expenses that require infrequent decisions, like housing, transportation, and insurance. And while she’s definitely in favor of saving, Vanderkam says that forgoing all pleasure now in order to fund a 30-year retirement where you do nothing is unrealistic. Better, perhaps, to have some fun now and save enough to fund you working part-time at a job you’re passionate about in your later years.

For spending, she says that many people just assume that their dreams are too expensive and so never try to make them happen. She suggests pretending that you have $10,000 to do with as you will. Plan it out, see what you really most want – and then see what you might really be able to accomplish. (I really liked here that first on her list of unattainable dreams was traveling to Mongolia, a long-time dream of my love’s.) Many dreams really have more to do with people and time than money, so that planning a weekend of dreams come true can be cheaper than you think. She talks about the cost of children – citing statistics to show that Americans are having fewer children than they want, and looking at the decreasing costs of having more children and how really large families afford it. In the chapter “The Chicken Mystique”, she looks at the current popularity of raising chickens and other do-it-yourself things. Is it cost-effective? Is it worthwhile? It depends, she thinks, on how much you really enjoy the specific activity involved more than trying to escape the money economy.

Since the focus of the book is on happiness, it’s perhaps not surprising that her chapter on charitable giving looks specifically at the intersection of generosity, happiness, and effectiveness. Giving can make us happier, and happier longer, than buying things for ourselves, a proven fact that we mostly don’t seem to realize. We are happiest, too, when we know who is benefiting from our charity, which explains both the growth of micro-giving causes and the failing of the United Way in recent years. She recommends developing a charity budget, with most going to a very few causes that you really care about and can get involved in, and a little saved for impulse giving. Vanderkam also looks outside of traditional giving to looking at how we can make our regular spending support things we like and believe in – creating jobs and a more pleasant place to live, for example, by spending money at locally owned businesses. That’s hardly new information, but she does make a good case for individuals buying locally being more effective at creating jobs than larger-level government spending.

In closing, Vanderkam talks about being conscious of enjoying what we’ve bought and watching out for diminishing returns. She also talks about raising money-savvy kids: studies show that just giving kids allowances makes them feel entitled, while either having them work for money or lobby for it when they need it does better. Best, however, is being raised by money-savvy parents. Though this bit felt a bit tacked-on, it was very useful information, as I’ve previously only seen philosophical arguments for managing kids and money, without any back-up from research. The end of the book has a series of worksheets from the whole book, which look very interesting.

All in all, this is a great book for thinking about money and how to develop a positive relationship with it. Though her advice isn’t mainstream, happily what she has to say about money dovetails perfectly with my favorite hands-on money book, All Your Worth by Elizabeth Warren, which gets into the nitty-gritty of balancing your money so that you have enough for needs, wants, and saving without feeling pinched or needing to count every penny.