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A Pile of Money Is Not Enough

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When it comes to finances, most people pore over the quantifiable aspects of money -- the actual dollars and cents; the balances in our checking accounts, the gains in our portfolios. After all, is not the definition of financial success having money in the bank to live decently today and enough of it squirreled away for the future?

Good start, but there's a lot more to it if you want to be more than simply financially secure. What about happiness (or, if you're a tad on the glass-half-empty side of things, contentment)? What about feeling fulfilled?

"Yes, you need to accumulate a certain amount of wealth to live in a certain way," says Paula Boyer Kennedy, co-author with Stacey Tisdale of The True Cost of Happiness: The Real Story Behind Managing Your Money. But simply focusing on, for example, getting a certain return each year -- and even achieving it -- is no guarantee of happily ever after.

It turns out that a big ol' pile of money, though undeniably nice to have, may not actually deliver the kind of life that you really want to live. By underplaying the personal side of personal finances -- and focusing mainly on the accumulation and preservation part of wealth management -- we sell our happiness short.

The money shrink is in
Changing the way you assess financial success means delving into the psychological side of your financial life. (See my interview with the authors about the ways our parents, peers, the Joneses and others sway our financial decisions -- both good and bad.)

Kennedy and Tisdale use the tenets of financial life planning as their blueprint to integrating money and life. The exercise isn't a simple one, particularly for those who are used to focusing on the traditional, tangible elements of money management. And, yes, there's some touchy-feely stuff required -- e.g., "internal work" (like exploring your feelings, emotions and ideas).

Tissues are optional.

5 ways to add your life to your financial plan
Before you balk at the non-traditional approach, here are some simple ways to add more of that personal touch to your financial plan.

1. Identify your real goals.
Don't skip right to the numbers. Identify what truly puts that kick in your step every day. Start with the "Financial Self-Reflection" worksheet from Fool.com's "How to Set Up a Spending Plan." Awareness isn't an automatic fix, but it helps you address your challenges.

2. Explore your behavioral influences.
Reflect on the familial, social, and personal powers at play in your financial choices. Write down things that trigger unwanted actions and tap into those that serve you well instead. (For help delving into those subconscious influences, see "Money Woes? Blame Your Mother.")

3. Adjust the numbers and make goals concrete.
After you have a clearer picture of your current spending (use the "Where Does My Dough Go?" worksheet, also found under the "Set Up a Spending Plan" Money Goal), make a concrete plan using the "Set Spending Priorities" worksheet to redirect your money to best reflect your real desires.

4. Use visual cues to remind yourself of your goals.
Keep the bad influences in check -- track your progress (post it on the fridge!) or carry a picture of your dream home in your wallet.

5. Remind yourself that change is gradual.
Money mindfulness isn't instantaneous. It takes continual work to alter a lifelong way of thinking. Use setbacks as tools to identify areas in which you're still vulnerable.

More tips to tackle your finances and still have a life:

Dayana Yochim writes about behavioral finance, couples and cash, saving, spending, investing and shopping (her personal favorite) for Fool.com.


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