“After all, money is just a tool, like fire. Some people misuse fire, and some people assign too much meaning to money – whether they love it or hate it. But like most tools, it’s really just a more efficient and useful means toward whatever ends we desire. Even achieving happiness.”
In her latest book, All the Money in the World: What the Happiest People Know About Getting and Spending, Laura Vanderkam (who also wrote 168 Hours) helps readers to be deliberate and thoughtful about the question of money, challenging widely accepted ideas about it, and offering suggestions for how to better get and use it.
A lot of personal finance books offer advice on how to set up a budget, cut your latte factor, or get out of debt, but I’d argue that reading All the Money in the World would be a better investment of your time because of how it will challenge you to really think through your assumptions and beliefs about how you get, spend, and give money. Vanderkam points out that money is a tool to help you live your life, so thinking about money and finances is really about thinking through what kind of life you want to lead, what you want to do, and what you want to achieve.
Vanderkam exposes quite a few common assumptions about money, and provides research and suggestions for why you might want to reconsider things like:
- Spending a fortune on an engagement ring and big wedding versus spending that amount over the course of your life to invest in your marriage (since happiness is more about frequency than intensity),
- How much you really need a lawn (since so few people love to take care of one and they are so expensive to maintain),
- Whether or not you can really expect to retire (and why you might want to just get a job you love instead),
- How many kids you can afford (and what “afford” means when it comes to a family),
- Aspiring to a big house (when that means more housework and yard work, tasks which most people don’t enjoy).
Most interesting to me was the section where Vanderkam challenges conventional wisdom about cutting back expenses to save money. She points out that most households spend 10% of their budgets on food and clothing, but 40-50% of the budget on housing and cars. Sure, you can cut coupons and hit sales, but you might be better off keeping your housing costs lower or rethinking your vehicle situation. She admits that the grocery and clothing cuts are easier to make immediately, but the way she discusses home and travel expenses is nuanced enough to be helpful even to families who already feel like they have those categories at bare bones level.
As I mentioned earlier this week, we are thinking deeply about what it means to pursue justice as a family, so I got a lot out of the section in the book about giving. Vanderkam discusses why being generous and helping others is a good way to spend money and points out several examples and suggestions for how you can be a “microphilanthropist” even if you don’t have a lot of money to spare. She advocates being involved and connected to causes you support, which I agree is critical, and lists resources for building that engagement.
Another great section discussed the hedonic treadmill (how something can feel so awesome when you haven’t been able to afford it before, but quickly becomes old hat) and how to combat it, including how to teach your children to appreciate their blessings without becoming entitled or misunderstanding the connection between work and money. We’ve been talking in our family lately about how to handle allowances, so I appreciated the research Vanderkam highlighted.
The book ends with a series of exercises designed to help you think through the topics presented in the book. These include the big picture, getting, spending, and sharing. I can see how this would be a fabulous book to go through with a book club or to read with a friend or your spouse, because the questions lend themselves to a lot of reflection and discussion.
What I love about this book is that it’s not a how-to book for austerity or a one-size-fits-all prescription for achieving some particular level of financial status. Rather, it’s an empowering book about understanding your own life and your own priorities and goals, and how you can use money to live a better, happier, more fulfilling life. Understanding this is so critical, no matter what your situation or aspirations. Having money won’t make you happy, but using money to achieve your purpose will.
I found All the Money in the World tremendously helpful and would highly recommend it, whether for personal reading or in a group setting.
To borrow a question from the book, if you had all the money in the world, what would you change about your life? How could you make those things concrete goals and actually accomplish them?
If I had all the money in the world I would travel. It’s something I really miss. I would love to take the kids to visit the places we read about and expose them to the beautiful and interesting places and people around the world. And I’d like to spend more time with my best friends, who live scattered all around and who would make marvelous companions for cheese tours of Europe and carpet tours of the Middle East and assorted Asian adventures. I’d also hire a full-time housekeeper to clean messes and handle administratrivia so I could focus on my family and be more productive. I’m still working on the implementation phase of these ideas. How about you?
Disclosure: This post contains affiliate links. The author of the book provided me with a review copy but the opinions in the post are my own.