Andy Stanley - How to Decrease Financial Pressure
Hi everybody. Welcome to "Your Move" where we help you make better decisions and live with fewer regrets. I'm Andy Stanley, and today we're talking about the relationship between happiness and your money. And fear not, I don't want any of your money. In fact, I wanna help you hang on to more of your money. Now, you've probably heard it said that money won't make you happy. To which you probably thought what I thought the first time I heard that, I thought, well, maybe not, but I would at least like to try it out, you know, just to see if it would make me happy. Because one thing I know for sure, being broke won't make you happy either.
So is there a relationship between money and happiness? Absolutely. But most people don't understand that relationship. They assume that more money equals more happy. But you know that's not true because you've met some wealthy people who are not very happy and you've probably, well, you probably know some middle class people who are not very happy. But you've probably met some less than middle class people who seem to be extraordinarily happy. So what's up? Here's what's up. The relationship between happiness and money is not intuitive. More of one does not equate to more of the other, and less of one doesn't necessarily equate to less of the other. And for the record, I sincerely wish you more of both, more money and more happiness.
So let's unpack this, and I'll make you a promise. Once you understand the relationship between money and happiness, you are set up to gain more of both, more money and more happy. So stay with me to the end. First word about happiness. Your happiness is directly impacted by your quality of life, not your standard of living. Again, and this is so important, there is a direct correlation between your happiness and your quality of life. There is no direct correlation between your happiness and your standard of living. This is why you've met happy rich people as well as happy, not so rich people. Standard of living is not determinative.
As long as you buy into the lie that it is, well, you're gonna be tempted to get richer in order to get happier. And you may get richer, but you will not necessarily be happier. You can raise your standard of living and lower your quality of life, all at the same time. People do it all the time and you think, well, how is that possible? Here's how it's possible. You can raise your standard of living with debt, right? Bigger house, newer car, extravagant vacations, and from the outside looking in, it looks like you're just living the good life, the above average life. But raising your standard of living with debt actually shrinks or eliminates the key ingredient to your happiness. Namely margin, financial margin.
Financial margin is the gap between what you make and what you spend. Financially speaking, margin actually equates to peace. Margin equates to less worry. Margin equates to a better quality of life because you don't worry about something breaking or something breaking down. Financial margin means you are investing in your own future and that equates to peace of mind, greater quality of life, more happy. So more money will not make you more happy, but financial margin certainly will. The challenge is temporarily raising your standard of living is much easier and quicker than raising your quality of life.
One requires a half decent credit score and a couple new credit cards. The other, increasing your quality of life, requires something more demanding. More demanding, but in the long run, more rewarding, and I mean more financially rewarding. Increasing your quality of life, your happiness quotient, requires discipline. Discipline is always rewarding in the long run. And financial discipline is always rewarding financially in the long run. And this is where people get confused and I'll illustrate what I mean with a series of questions. In fact, these are trick questions. So follow me. Question number one, how much money does the average person need in order to break a bad financial habit?
Think about it. How much more money does a person need, does the average person need, in order to break a bad financial habit? The question doesn't even make any sense, does it? Money doesn't break a bad habit. Discipline breaks a habit. More income doesn't create more discipline. Again, there's no actual correlation. But most people in the United States, most people in the United States, they don't lack for income. Do you know what they lack for? Self-control. So here's another trick question. How much additional income would it take to get you in the habit of saving more and spending less? No amount. Living within your means is a discipline issue, not an income issue.
Here's another one. How much more money would it take to erase your financial worries? Without discipline, without self-control, more money would just mean bigger bills and probably more debt. It happens all the time. Isn't it true when you hear about somebody who's super wealthy declaring bankruptcy? Don't you think what? I mean, how could he or how could she run out of money? It's easy. No self-control, no discipline, it's just a matter of time. More money does not equate to more self-control or more discipline. But self-control and discipline do result in more money. More importantly, they result in margin, which results in peace, which is an essential to your happiness. And people with financial margin have it because they choose it. They discipline their way there. So money won't make you happy, but managing your money well will certainly contribute to your happiness.
So with all that in mind, I wanna encourage you to embrace two financial habits. And yes, both will require some discipline. These are two habits, older, wiser friends suggested 40 plus years ago, and I have practiced these two habits ever since. First, I want you to begin tracking your spending. I want you to record every dollar you spend, categorize it and write it down. Or use one of the many free online tools to record your spending. Everybody should be knowing where their money is going, right? You should be knowing where your money is going. This is a financial discipline that pardon the play on words, a financial discipline that will pay huge dividends. The first and best financial habit you can develop is not spending less. It's tracking your spending.
This is a keystone habit that has the potential to significantly positively impact your financial future. So document every dime you spend. Do that for two months, then sit down and look at it. If you're married, look at it together. Then decide, do we like what we see? And is this going to get us where we ultimately want to be? Second habit, give first, save second, live on the rest. Give first, save second, live on the rest. Give, save, live. This is the opposite of how most Americans manage their money. Don't be most Americans. Most people spend first, save second, and then give, if and when they feel like they can afford it. I dare you, I dare you to flip that script for six months. Choose a percentage of your income to give away and then give it first, then fund your own future. That is, choose a percentage of your money and save it. Then live on the rest.
That discipline, along with tracking your spending will position you to save more, give more, and actually create more margin. And as your income increases, your standard of living will increase as well. And how do I know that your income will increase? I'll tell you why. Because people who are disciplined with their money make more money. The rich do in fact get richer, but they rarely start off rich. They discipline themselves to rich. Now, too many people are stuck in what I call the insane cycle. They spend more than they make. They go into debt, they live with no margin, then they worry. And then what do they do? They spend more than they make. They take on more debt and they have more worry. That is insane. And you don't wanna live that way, and you don't have to live that way. So choose not to live that way. Begin this week, tracking your spending. Then flip the script. Give first, save second, live on the rest. And if you do, you'll have margin. You'll have peace, you'll be happier, and eventually, you'll have more money. And now it's your move.