Chelsea Fagan: Money Can’t Buy Happiness, Can It?

Chelsea Fagan

Hello. This is Marc Lichtenfeld, Senior Editor of Wealthy Retirement and Chief Income Strategist at The Oxford Club. You’re listening to my exclusive audio library, “A Wealth of Knowledge.” I’m so excited that you’re taking the time to learn from some of the masters of the money world who I’ve been lucky to cross paths with over my years in the markets.

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Marc Lichtenfeld: Chelsea, thanks so much for joining us. Tell us, why can money buy happiness, in your opinion?

Chelsea Fagan: Well, thanks for having me. So I wrote the article basically to sort of illustrate the idea that happiness itself, obviously, is not something that can be purchased. But the circumstances that need to be present in order to find happiness can be bought.

Which is sort of like that baseline of security, of comfort, of knowing that, if something goes wrong, it’s not the end of the world. And not having the day-to-day stress of financial instability bearing down on you. Because that is sort of what enables you, then, to experience happiness and to enjoy things as they happen.

Marc Lichtenfeld: You know, I think you nailed it right on the head. I mean, I’ve been very blessed in my life. I have a wife who I adore, kids who are great, a job that I love. I really have absolutely nothing to complain about.

But several years ago, when I kind of had no idea how we would ever pay for college or retire someday, I had all the normal stresses that everybody else has about money. And I wouldn’t say that I wasn’t happy, but I was more stressed out.

And fortunately, things have changed a little bit and I have a little bit more wiggle room financially. And I know, personally, I am so much calmer and happier and able to enjoy the moment.

And it’s the kind of thing where people don’t really talk about it too much because nobody wants to – it almost feels shallow to say, “Yeah, money can buy happiness.” So I’m glad you touched on it.

Chelsea Fagan: Yeah. It’s really frustrating because I think that the people who say it tend to be people who have it.

Marc Lichtenfeld: Exactly. And that was another point in your article. That it’s rich people who often say, “Oh, money can’t buy happiness.” But we all know plenty of rich people who are miserable. And are miserable people.

Chelsea Fagan: Right.

Marc Lichtenfeld: And so, the point of your column is, it’s not that money buys happiness. If you don’t have a reason to be happy, you’re not going to be happy no matter what. But, if you have reasons to be happy, alleviating that stress is a very big factor in happiness.

Chelsea Fagan: So I had this very unhealthy relationship with money, where I wasn’t proactive about it. I spent without thinking about it, and I would easily go through a whole month’s worth of free income on $20 and $30 purchases – nothing where I really knew where the money was going. It was just going.

So I started the blog to sort of keep track of my own financial life. And obviously it grew from there. But for me, the luxury of spending less is about making – you’re never going to not spend. To me, it’s a lot like food – which is part of why I called it a diet – because you’re always going to have to eat, and you’re always going to have to spend money.

For me, I think it’s more intelligent to really be conscious about how you’re spending that money. To buy one thing, but of good quality. And really looking for deals and really asking yourself what you want. And know where all of your money is going and saving more of it.

Which is also how I feel about a relationship to food – making sure that your decisions are the ones that you really want to be making and that you’re really enjoying and getting the most out of whatever you choose to spend your money or, in this case, your calories on.

So I think for me, it was a way to get a balanced lifestyle, where I never used to have one. And a way to not cut spending out entirely, but to just be smarter about spending and to be more aware of where my money’s going.

Marc Lichtenfeld: We’re talking with Chelsea Fagan of The Financial Diet. So this clearly sounds like it was a learning process for you too. What are some of the main tricks or things that you’ve learned about how to spend less but still enjoy your life and still enjoy the quality things in your life?

Chelsea Fagan: Sure. So I have pretty hard and fast rules about the money I’ll have on me at any given point. That’s a huge help. I have certain cards that I leave at home, that never leave the house, that are only for specific bill payments or specific purposes. So that’s a good thing – not keeping that much money on me at any time.

Sometimes I’ll carry only cash. Or if I’m going out to walk the dog or run an errand, I’ll take no money or just a little cash. I really want to just prevent myself from making off-the-cuff purchases in that way. Because I think that having your card on you all the time – with your checking account or a credit card with a high limit – you feel a fluidity about money that I think is really unhealthy. It doesn’t seem real in a way.

Whereas if you have only a little bit of cash on you, you’ll say, “Oh, is this coffee really worth it? Is this book really worth it? Is this sandwich really worth it?” And if it’s something that you do want to buy, you can always go back and get it later. But I find that usually you decide you don’t need it at all.

So that’s been a big thing. I’ve gotten a lot smarter about how I use credit to my advantage. I use it to pay automated bills and then pay the credit card back immediately. Just to have a healthy relationship with credit also serves a purpose. You’re not just going out and buying things for the sake of buying them – you’re sort of being more intelligent about how you pay the things that you have to pay.

I guess another big thing is that I buy quite a lot less now, but I do spend more on individual items when I buy them, usually. I’m talking about things like home décor, apparel, that kind of thing.

Marc Lichtenfeld: Right.

Chelsea Fagan: Only have one coat, but make it a great coat that is going to last for years and years. So that sort of thing has been probably the biggest shift. Because it’s also a huge mentality shift – no longer looking at a couple hundred dollars on one item as being crazy. Because you think about that payment broken down, with the item lasting over years and maybe your whole life.

And then, I guess the last thing is that I cook at home for 80% of my meals. I mean, I always enjoyed cooking, but I never really forced myself to do it a lot. And I was in New York City, so having food delivered is always a really easy option. Or going out to eat. And now I really force myself to cook pretty much all the time, and it’s become second nature. And that’s just a huge, huge way to save money without really having to try.

Marc Lichtenfeld: Good stuff. And I agree with you 100%. I’m a big believer in buying quality. I think, in a lot of cases, you get what you pay for. Unfortunately, we’re up against the clock. I did want to mention, though, I really like the Financial Confessions section on your site, where you have different people writing about different mistakes that they’ve made or things that they’ve learned. I think there’s some really powerful stories there. So, nice job with that.

Chelsea Fagan: Thank you.

Marc Lichtenfeld: We would love to have you back, maybe later in the year, and check back in and hear some more things that you’ve learned and some other tips. So let’s coordinate that in the future.

Chelsea Fagan: Sounds good, thank you.

Marc Lichtenfeld: All right. That’s Chelsea Fagan.

I hope you enjoyed our conversation today! I love being able to share these special discussions because they each offer a different perspective on how to be smart with your money while leading a rich and fulfilling life. Feel free to explore the rest of my archive for more interviews, and as always, thank you for being an Oxford Income Letter subscriber.