Hard work and good fortune: what self-reliance means for our financial well-being

Hard work and good fortune: what self-reliance means for our financial well-being

If your approach to money is “more is more,” you are probably not alone. When it comes to the relationship we have with our own money, however, what counts is how it was earned. It turns out self-reliance, a tried and true philosophy touted by philosophers from Nietzsche to Emerson, can provide the framework for our financial well-being.

When we consider our finances as they relate to our sense of well-being, the importance of self-reliance cannot be underestimated. Research shows that people need a baseline income to feel secure, though emotional well-being derived from annual income plateaus at $75,000. Beyond this baseline, the way that income is earned is a key variable to feeling good about wealth.

This was tested in a well-known analysis (pdf) which compared happiness derived from the mundane activities of lottery winners and non-lottery winners. The study found that lottery winners were not significantly happier than a control group of non-winners, and that non-winners took more happiness from everyday activities than winners. It concluded that the outlier event of a sudden windfall skewed one’s ability to derive happiness from life as usual because the winners had lost the ability to find meaning in their daily activities.

We may not relish every commute or deadline, but our pride and self-worth are elevated through work, especially work we find meaningful.

Shortcuts, like winning the lottery, may feel good temporarily, but can affect our ability to achieve long-term happiness. For almost all of us, life as usual means earning a living. We may not relish every commute or deadline, but our pride and self-worth are elevated through work, especially work we find meaningful. The process of earning a living also gives us the foundation of choice by empowering us to forge ahead in a way that feels genuine, relevant, and makes us authentically happier. Having the capacity for choice when it comes to earning means that we also have the choice to take ownership of managing our money for the present and future.

We can apply the same concept of self-reliance to how we think about supporting ourselves when we retire. With our future selves in mind we can maximize current actions so they can benefit us down the line. This may mean adding an additional 1% of income each month to your retirement savings accounts (your 401k, for example), or foregoing bottled water in exchange for tap. Another way to save for the long term is to indulge in small, pleasurable experiences on a regular basis, rather than lavish, extravagant expenditures. This not only helps us budget and save, but can also contribute to our happiness over the course of a lifetime.

Embarking on a goal of long-term self-reliance can be confusing and complex. In such cases, it may be helpful to seek trusted guidance, someone who can advise on saving wisely. It is worth pointing out that this is not the same as seeking the easy way out: learning about emergency funds from an expert is a way for an individual to strengthen his or her self-reliance. When we make self-reliance a core value, we can use our intuition to tell us when to call upon the expertise of others.

Emerson’s cornerstone essay on self-reliance reminds us that we are, ultimately, our own means to happiness. “Nothing can bring you peace but yourself” he wrote. His enlightening words remain evergreen. If we learn to take ownership of our actions, including the way we earn and save, we enjoy the ways that self-reliance can make us sustainably happy. That kind of happiness may be hard-earned, but certainly well-deserved.

This article was produced on behalf of Prudential by Quartz Creative and not by the Quartz editorial staff.

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