In some ways, feeling “rich” is less about how many zeroes you have in your bank account and more about knowing how to use them to get what you want out of life.
For author and certified financial planner Tom Corley, feeling rich comes from having a pub-style structure in his backyard in the US state of New Jersey that allows him to invite friends over for outdoor entertainment.
For Liz Gendreau, founder of the website Chief Mom Officer, that feeling comes from taking advantage of free, fun activities such as visiting local state parks in her home state of Connecticut.
And financial counselor Andi Wrenn in Raleigh, North Carolina, finds that feeling when she climbs into her recreational vehicle and goes for a road trip.
“Richness comes from having small, tangible financial goals that you’re working towards,” says Megan McCoy, assistant professor of personal financial planning at Kansas State University.
Those goals could be paying off student loan debt, buying a house or something unique, such as Mr. Corley’s backyard structure.
We asked financial experts to share their tips for how to feel richer today, given the current levels of financial uncertainty and stress.
Here are their top suggestions:
Reflect on what you value
Ms. Gendreau knows that cars aren’t important to her, but family time is. So, instead of spending money on a new car, she puts her money into family activities. She stretches her budget on those, too, by taking advantage of free museum passes, local libraries and state parks.
“It’s all about finding fun things to do that don’t really cost much money, but bring a lot of joy and happiness,” she says.
Indulging in those kinds of adventures gives her the feeling of being rich, even though the activities aren’t costly.
Mr. Corley, author of Rich Habitscalls that strategy “value-based spending”.
He encourages people to think about what’s really important to them, such as travel or spending time with friends and family, and to focus on directing money towards those areas instead of material goods that might not provide as much joy.
Pick healthy role models
That joy-focused approach can also help with feelings of financial envy.
“If you don’t have value-based spending, then you can fall victim to comparing yourself to others and lifestyle creep,” which is when spending grows along with income, Mr. Corley says.
When we constantly compare ourselves with richer neighbors or influencers on Instagram, it’s easy to be dissatisfied, Ms McCoy says.
“We need healthy comparisons. Is there someone else you could compare yourself to, such as your past self, or your aunt who worked so hard and got the retirement of her dreams?” she adds.
Hide posts on social media from people who inspire feelings of jealousy or put your own spin on them, Ms. Gendreau suggests.
“If I see something that looks like a lot of fun at a fancy place that’s outside my budget, I might think, ‘can I do something similar at a lower price point? Do I need to go to a fancy beach place or can I go to a closer place?’ I don’t need to go to the Caribbean to have fun on the beach,” she says.
Cultivate resilience with savings
“You are going to make mistakes,” says Heath Carelock, a financial counselor and coach. To move past them, it’s important to forgive yourself and to build up a financial cushion.
When he was starting out in the working world, he gave himself what he called the “1-2-3-4-5” challenge: He saved $123.45 out of every paycheque.
“Watching your money accumulate is a major way to double down on resilience,” he says. Then, if you face a sudden, unexpected expense, you have a financial cushion to protect yourself, which evokes a feeling of “richness” or comfort.
“People are a lot more relaxed if they have emergency savings so they know they can pay off whatever bills they need to every month,” Ms Wrenn says.
Even saving one or two months’ worth of expenses can provide that elusive feeling of financial well-being, she adds.
Create a budget and pay off debt
“If you don’t track where your money is going, you will feel financially insecure because you’re worried all the time about, ‘where is my money going?'” Ms Gendreau says.
She suggests using a budget to track your spending, especially given current inflation levels.
Debt can prevent people from pursuing their dreams, Mr Carelock says, because instead of putting money towards starting a new business or taking a holiday, you have to put it towards debt payments.
“If it’s not a dream killer, it’s a dream delayer,” he says.
Using an online calculator to make a plan to pay off your debt can help.
Celebrate your progress
When Ms McCoy finally paid off six figures in student loan debt, she celebrated her first withdrawal-free paycheck. But she says she would have felt even better if she had celebrated her progress along the way instead.
“I just had one moment of happiness that quickly dwindled. If I could do it over, I would celebrate every $10,000 I paid off — then I could have celebrated 10 times.”
Updated: August 16, 2022, 4:00 AM