What's Enough Money?
Tips for balancing money and career with other life values.
Posted May 11, 2015
By Jennifer Haupt
Jim Merkel made a good living selling weapons to the military until the 1989 Exxon Valdez disaster made him question the personal costs of his lifestyle. “I’d had deep concern about the environment in my younger years, but it took a catastrophe to re-awaken it,” he says. “The devastation that resulted from that oil spill made me take a hard look at how I was making money and spending it.”
Like Merkel, a growing number of Americans are grappling with questions around how making money fits with their core values and redefining their concepts of wealth. Merkel quit his high-paying job facilitating war to become an advocate for saving the earth. Since then, he’s basically lived on the interest from his savings, $5,000 annually (except for a short stint when he was teaching) and been devoted to leaving a smaller carbon footprint.
The much quoted Esterlin Paradox, based on a 1974 study by Richard Esterlin, Professor of Economics at the University of Southern California, states that once basic needs are met, happiness does not increase with higher incomes. But recent research from the Brookings Institute indicates the contrary: that when it comes to the link between money and happiness, more really is more. So, how do we, as individuals, decide how money really is enough? And, how does earning a living fit into our value system?
“It’s not money that’s the problem, but the meaning we give to it,” says Dave Wann, author of Simple Prosperity, among other books on sustainable living. “With the downturn in the economy, more people are examining a new paradigm for looking at wealth, and defining it in terms of their values instead of just money and the stuff that it buys.”
Even if you’re not going to the extreme that Merkel has, there are ways to start re-examining your concept of wealth.
If a career change is needed to live a wealthier lifestyle, planning ahead is key. “My husband and I wanted one of us to work from home and be the main caregiver for our children,” explains Cathi Brese Doebler, author of Ditch the Joneses: Discover Your Family, who left her full-time management job 12 years when the first of her two sons was born. “I dropped down to part-time hours for my employer for about a year while I started my own consulting business. We changed our lives slowly, to avoid major financial risks.”
Doug Nordman had a modest savings account and a rental property when he retired from a 20-year Navy career in 2002, at age 41. “My wife and I had the idea of being financially independent in mind, but our plan B was working part-time,” he says. “Luckily, we’ve been able to enjoy a low-key lifestyle in Hawaii and spend eight years full-time with our daughter before she went off to college.”
Decide what really matters.
According to Doebler, when it comes to down-sizing your budget, the little everyday day things can add up. She and her husband took a hard look at their "wants" and "needs,” keeping in mind that family comes first on their list of values. Even one simple change can save big money. Simply switching their cable TV plan down to the basic channels has added up to a savings of more than $4000 during the past twelve years.
“We didn’t cut back on TV channels just to save money, but also because we wanted to spend our evenings in ways that better align with our values,” Doebler says. Their family plays board games and watches movies from the library in the winter, and spends a lot of time outdoors in the summer. None of which costs a cent. Doebler also cut thousands of dollars per year by making lunches for her husband to take to work and slashing take-out dinners from the menu in favor of nutritious home-cooked meals.
“It’s not so much about giving things up that cost money, but aligning your values with what you’re willing to spend money on,” says Wann, who is the community gardener in his sustainable neighborhood of 27 families. “Growing food for me and my neighbors meets my needs in a variety of ways. I get to eat healthy food, spend less on groceries, and take care of the earth.
When Doug Nordman retired from the military he had job offers, but one reason he opted to instead downshift his spending habits was in order to give back. He spent six years researching and writing The Military Guide to Financial Independence and Retirement, which draws on the stories and advice of other military service members who he networks with online. Not only does he enjoy building community, but he’s also donated thousands of dollars in royalties to military charities like the Wounded Warrior Project and Fisher House.
Find like-minded communities.
According to Wann, whose neighbors help support his garden with small contributions of money and time, there’s a lot of power in numbers. “I started this community with six families and over the past 17 years it’s grown four-fold,” he says. “The key is that we support each other, our lifestyle choices and our goals. And, we enjoy the everyday experiences of doing that.”
Merkel lives in a small town in Maine, where he knows most of his neighbors. But he also connects with like-minded people all over the country when he speaks at college campuses, town halls, and companies who also want to leave a smaller carbon footprint. “Even though I get frustrated because things aren’t changing in the positive direction I’d like them to, just the fact that thousands of other people share my concerns is energizing,” he says. “That helps keep me on-track.”
Value the non-monetary rewards.
The new paradigm for wealth that Wann advocates is still based on rewards, but they come from experiences rather than the things that money buys. The good news is that the rewards of a down-sized budget and lifestyle are often immediate. “Balancing the family budget isn’t always easy, but it’s about creating a more balanced life in general,” says Doebler. “There were instant rewards that money simply can’t buy when I cut back my work hours. I’ve been able to be with my children as their main caretaker through babyhood, toddlerhood, and beyond.”
Money isn’t the only source of wealth, and it’s certainly not the source of spiritual fulfillment. David Wann suggests exploring a new paradigm for wealth that includes:
- Create a richer life story through investing in your personal growth
- Form higher-yield friendships and increase your social capital
- Take preventive healthcare measures to build up wellness reserves
- Care for your neighbors to improve your community wealth index
- Cultivate energy savings
- Invest in prosperity futures by valuing the earth as a sacred place