Money Matters: How Much Is Enough?

News flash: those shiny, happy people on the front of the 401(k) brochure? Models. Fakers. Well-paid pretty faces. In their blemishless, flatteringly lit world, money is simply a tool for building a better life, not a keeps-you-up-at-night, ulcer-making foe. Brochure people religiously track their modest expenses on the latest version of Quicken. They budget their spending and wouldn't dream of back-ordering the luxe handbag du jour because it's so darling and they just really, really want it. They don't lease or lay away or run up credit card balances as a substitute for self-esteem or meaningful relationships. Vacations and tuitions and retirements have been planned for, the stock market is easy to understand, salaries yield more than enough to get by, and cash, well, it flows.

We hate those shiny, happy brochure people.

But the truth is, we wouldn't mind being that smart about our own money. So O asked psychologists, financial advisers, social activists, and other big thinkers to weigh in on the question of why it never feels as though we have enough—and to offer answers that can help real-life people stop the money madness.

How to get the most happiness from the money you have:

Daniel Gilbert, professor of psychology at Harvard University and director of the Social Cognition & Emotion Laboratory

"One reason we keep chasing dollars and are oddly disappointed when money doesn't provide happiness is that it once did. It's a little like alcohol. You think if one drink makes you feel good, ten will make you feel better. That turns out not to be true. I think most people spend unwisely. To maximize happiness with the money you have:

You'd invest in small pleasures. That's not what most of us do. We save up for the trip around the world or the Ferrari. But we now know happiness comes from lots of good things happening, not one really good thing. When I first came to Harvard, I would have said that the greatest thing is to be here. But it turns out the greatest thing is that I get to walk to work, twice a day, every day.

You'd also invest in disappearing pleasures—chocolates and vacations versus a car or a washing machine. Most of us like things that we can keep, so a washing machine seems like a better investment than a vacation. That's the wrong way to think. Things that stay around have a tendency to disappoint us after repeated use.

And you'd invest in social pleasures: Good marriages and lots of friends are much better predictors of human happiness than wealth."

Ask yourself, "Is this a need or a want?"

Michelle Singletary, The Color of Money columnist for The Washington Post and author of Spend Well, Live Rich: How to Get What You Want with the Money You Have (Ballantine)

"Enough is never enough because there's all this pressure to buy—so many images [of stuff] come at us from television and radio. We're mere mortals trying to fight the marketing machine. We spend too much on stuff—self-storage space is one of the fastest growth industries.

I challenge people to come up with personal mantras about their money and to practice them every day. When you have a mantra, you can use it to respond immediately to any message that you don't have enough. Here are a few of mine:

1. If it's on your ass, it's not an asset. Spend your money on things that appreciate in value.

2. Ask yourself, Is this a need or a want? It is unbelievable how often we fail to ask that basic question. Nine out of ten times, you'll say it's a want and then put it back.

3. Priorities lead to prosperity. I'm talking about focusing your energy and money on things that really mean something to you. Parents say they want to send their kids to college but then spend that money on toys and clothes and gadgets and shoes. You have to match up your priorities to what you want in life. When you create priorities, you set the stage for how to spend your money. That money is then spoken for."

I was a dope:

Bernie Brillstein, Hollywood producer and author of The Little Stuff Matters Most: 50 Rules from 50 Years of Trying to Make a Living (Gotham)

"I did every dumb thing you can do, but still I made money. I bought houses; I had a Bentley for a week. I was a dope. For a while, I thought things validated my success. [But I realized] my success validated all my success. So I got rid of the four houses—no more calls in the middle of night that the boiler blew up.

Everyone thinks money is the answer, but happiness is the answer. Money just lets you pick your own type of misery. I'm not a Holy Roller. I am excessive in my own way, but I really think it comes down to the simple things—the dog and my wife."

Have plastic surgery—chop up the credit cards:

Dave Ramsey, host of the financial advice radio program The Dave Ramsey Show, which also streams live on the Internet through DaveRamsey.com

"I'm often asked what the number one money problem in America is right now. It's that people wander through life like Gomer Pyle on Valium, then wake up at retirement and say, "Shazam! I'm broke." They don't have a plan.

On my radio show, we have $80,000-a-year couples call almost daily and they're broke. If you're a broke Yuppie, it's time to grow up. I've been there and done that, so I'm pointing at myself as well. Motivational speaker Les Brown said sometimes you have to tell yourself to shut up. I'm not suggesting that you become a tightwad just for the sake of being a tightwad. But if you can't pay for it now, you can't afford it. You are not entitled to a car or a leather couch, and your grandparents never went to Hawaii, so shut up. You can't wander through the mall like a drunk in a bar. If you're carrying credit card balances and you're mortgaged up to your eyeballs and you feel like a rat trapped on a wheel, it's because you're a rat on a wheel. So have plastic surgery—chop up the credit cards—and make a decision to do something different. Save for things. I want you to go to Hawaii—it's a beautiful place."

Get to enoughness:

Vicki Robin, coauthor of Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence (Penguin)

"We confuse money—pieces of paper or metal—with nonmaterialistic needs and desires. And we have lost our imagination about how we might meet many of these deeper needs without money. People who know how much is enough have everything they want and need to live a life they themselves define as fulfilling and meaningful. All their choices—from how they spend their time and how they spend their money to whom they hang out with—reflect that context. For these people, there is wealth beyond money; there is "enoughness," a stance of material sufficiency and spiritual affluence. They don't compare their assortment of stuff to someone else's stockpile to assess whether they indeed have adequate wealth. They develop economic resilience by learning new skills: buying in bulk, comparison shopping, doing yard work instead of going to the gym. They set up babysitting cooperatives so that parents can save money and have a life. And on and on."

People who are more materialistic are more likely to be depressed:

Juliet Schor, professor of sociology at Boston College and author of Born to Buy: The Commercialized Child and the New Consumer Culture (Simon & Schuster)

"Research shows that materialistic values undermine health and well-being. People who are more materialistic are more likely to be depressed and anxious and to get stomachaches, less likely to have friends—and energy. When parents are materialistic, their children become materialistic. Their teens are much more likely to engage in risky behavior—drug and alcohol use.

It's easy for parents to complain about their kids being spoiled but not see the ultramaterialism in themselves. For instance, they can take only a short vacation [because of work], so they spend big on the children to make up for it. Marketers are very keen on this, calling it guilt money. Changing this type of spending involves substitutions. The families I interviewed who are trying to create uncommercialized lives do time-consuming things, like spending hours building an igloo for a birthday party instead of buying something expensive that is a "wow" for the kids."

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From the March 2005 issue of O, The Oprah Magazine.