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It Might Pay to Follow Your Bliss
August 17, 2008 5:38 PM

In an interesting article last year, M. P. Dunleavey from the NY Times discusses the fable of the ant and the grasshopper:

The ant works hard all summer, socking away provisions for the winter; the grasshopper frolics away each day. The ant warns the grasshopper that he's being hedonistic and short-sighted. The grasshopper ignores the ant, and continues on his merry way -- only to perish when winter sets in.

It's a rather stern lesson about financial prudence, but there is a reason this tale has survived through the ages -- and still preoccupies many researchers who study the eccentricities of human economic behavior. Why do the grasshoppers of the world have such a hard time emulating the ants?

It's an old story that a few economists have tried to explain:

Yet economic research has demonstrated that most people find it hard to resist the siren song of "seize the day and spend what you have now" -- even though a lifestyle based on constant consumption doesn't enhance anyone's long-term store of happiness and often puts people on shaky financial ground.

This conundrum also bedevils those who work in the field of personal finance. Why do millions of Americans resist saving for their retirements? Why do so many carry thousands of dollars in credit card debt?

Indeed, the article uncovers research for some pretty plain and simple advice: focus on what makes you happy, since investing in your well-being and quality of life go a long way towards a more fulfilling life:

Tim Kasser, an associate professor of psychology at Knox College in Galesburg, Ill., studied 200 people who embraced Voluntary Simplicity, a movement focused "less on materialistic values -- like wanting money and possessions and status -- and more on what we called intrinsic values or goals," Professor Kasser said. The three main intrinsic values were being connected to family and friends, exploring one's interests or skills and "making the world a better place," he said.

Essentially what they found was that a life focused on those three things is more fulfilling then a life of consumption:

The study found that when people invested more in intrinsic values, like relationships and quality of life, and less in consumption, it seemed to increase their happiness. And, the study suggested, there may be a financial gain to doing so. Those in the simplicity group were far more likely than the control group to say that they were careful about their spending, Professor Kasser said.

Live simply, save money, be happier. Indeed, one of the best bumper stickers ever made said, "The secret to happiness is keeping your expenses low."

Amen!

For more resources to explore, go to the Simplicity Forum and check out what they've got to say...

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