Happiness, Low Stress, Pleasure, and a Firm Financial Foundation

It’s likely that at some point, you’ve heard of Abraham Maslow’s well-known hierarchy of needs. If you’re unfamiliar with the idea, let me summarize it for you.

In 1943, Abraham Maslow published a hugely influential article in the journal Psychological Review entitled “A Theory of Human Motivation.” In that article, which has been referenced and cited more times than a person can scarcely imagine, Maslow argues that almost all human needs break down into five groups:

  • Physiological needs, including such things as food, water, warmth, and rest
  • Safety needs
  • Belongingness and love needs, including intimate relationships, friendships, and family ties
  • Esteem needs, including prestige and feelings of accomplishment
  • Self-actualization needs, including achieving one’s full potential, creative activities, and so forth

Maslow argued that these needs are arranged in a hierarchy. You can think of it as a pyramid, with physiological needs as a broad base of that pyramid, with safety needs as the next layer up, then belongingness needs, then esteem needs, then self-actualization near the top of that hierarchy.

In Maslow’s hierarchy, people are primarily focused on just the layer of the pyramid that rests atop layers that they feel very secure in. So, for example, a person who only feels secure in their basic physiological needs is mostly concerned with personal safety and security and a person who has everything else fulfilled will focus on self-actualization.

He also argued that when a lower layer in a person’s hierarchy is disrupted, it is very jolting and traumatic to that person. For instance, when a person who is mostly focused on self-actualization needs suddenly finds themselves unsafe or lacking basic food and water, it can have a huge psychological impact on them and cause them to make some really strange and poor choices. It can bring about a strong sense of sadness and emptiness in life as well.

Quite often, when an otherwise healthy and successful person begins to feel an emptiness or sadness in their life, it’s because there is some ongoing disruption in their hierarchy of needs, and that person often becomes prone to making poor decisions because of that disruption. They feel something is off, but because their focus is on a different level of need in their life, they often really don’t know what that is, and they take actions intending to “fix” what’s missing and just completely miss the mark.

This brings me right back to my experience at a car dealership the other day. I stopped in to get a free factory recall fix done on an automobile of ours when I overheard a couple discussing which car they were going to buy.

One member of the couple felt they should be looking at used cars, while the other was basically uninterested in such considerations. As I listened to their conversation, it became readily apparent to me that they were currently focused on two completely different parts of their hierarchy of needs.

The person arguing for the used car was making the case that they simply couldn’t afford it. He was speaking about physiological needs and security needs. He was wondering how they were going to be able to pay the bills.

The other person, the one looking only at new cars, was very focused on esteem needs. That person was talking abut how he wasn’t going to be driving a used car to work and that such a thing would be unacceptable to his prestige there. He mentioned that everyone in his workplace drove a new car and many of them were driving a nicer model than they were looking at and that he was compromising by even looking at this mid-level model.

The partner looking at the new cars then walked away and I could see a mix of frustration and sadness on the face of the partner advocating for the used car.

For me, that conversation couldn’t have stood out any bolder if they had been shouting at each other with bullhorns instead of having a private and semi-quiet conversation with each other. Here, right before me, was a perfect example of what happens when different levels of needs begin to come into conflict.

It’s misery.

Here’s the thing, though: Our money choices and our spending decisions cause a ton of internal conflict in our hierarchy of needs. Those conflicts often end up putting us in a miserable life position.

Let me start off explaining why by giving you an example from my own life.

When I was first thinking about my financial turnaround, it was mostly driven by this weird sense of unease in my life that I couldn’t quite put my finger on. I actually wrote about that exact unease in an article entitled September 23, 2005, in which I shared my personal journal entry from that date. I felt really uneasy and unhappy with my life and I didn’t really know where it was coming from. I just felt massively unhappy and uncertain and I was completely incapable of pointing to the source of those feelings.

The reason was that I was focused entirely on esteem and self-actualization while I was doing real damage to the security and even the physiological needs in my hierarchy. I was doing things with my time and my energy and my money that were meant to boost my sense of self-esteem and self-actualization, but those choices were eating away at the deeper foundations of basic financial security and even basic personal needs.

I just didn’t see it at all.

The things I was spending my time and money on were all centered around my self-esteem. My career. My sense of prestige in my career. My intellectual interests.

However, in doing that, I was slowly eroding my financial security. I was eroding the long-term security of everything I relied on, from my housing to my car to my food. I was overspending in an effort to chase some kind of higher state in my hobbies and interests and career prestige and that overspending was eating away at the foundations that all of it rested on.

Even worse, because my “eyes were on the prize” all of the time, I didn’t see the weakening foundation. I felt it trembling under my feet, but my eyes were looking up in the sky. I felt uncertain and a little scared and very stressed, but I didn’t really see why I felt that way.

It took a big financial earthquake, one that would hit about eight months later, to get me to really rethink things and reevaluate my life. However, so much confusion and uncertainty and stress would have been avoided if I had just looked at the ground. If I had sat down and taken a serious look at my more basic needs and how they were starting to crumble, things would have been so much better for me in that time frame.

So, where am I going with all of this? It is my belief that looking at one’s life through the broader lens of this kind of hierarchy of needs reveals a few deep truths about money and personal happiness and fulfillment.

Truth #1: Unease and unhappiness about life, for most people, points to an erosion of a more basic level of life’s needs.

I see this crop up over and over again in my own life. I often see it pop up in the lives of others, as I described in that example above at the car dealership. I hear friends talk about their lives, too, and I see this same thing playing out, time and time again.

When people feel uncertain and unhappy in their lives and they can’t quite put a finger on it, there are two potential culprits. Either there’s a burgeoning health – physical or mental – issue or else they’re facing some sort of a challenge to some of their basic needs when their focus is not on those basic needs (or both, I suppose).

(I’m not going to directly address mental health or physical health concerns in this article. Health concerns are serious business and far beyond what I can or should address here. If you are feeling serious unease and unhappiness in your life and you’ve spent time trying to find the source of it without success, you should absolutely seek the consultation of a mental health professional or doctor. For the rest of this article, however, I’m going to focus on situations that involve normal uncertainty and unease and unhappiness that’s connected to a personal crisis of needs.)

If you feel unhappy with how things are in your life or where things are going in your life, step back and take a serious look at your basic needs. Are you physically well? Is your health starting to slip? Are you saving for your future? Are you consistently spending less than you earn? Do you feel safe at home or in the rest of your daily life? Are the core relationships in your life strong and secure?

If the answer to any of these questions is “no,” then your self-esteem and self-actualization (meaning things like your hobbies and intellectual interests and your sense of your place in the world) are on shaky ground. Those kinds of things rely on more fundamental needs being fully met. If those needs aren’t fully met, then focusing on things like your career standing or your hobbies can feel very hollow or stressful, whether you feel the source of it or not. Activities that were once deeply fulfilling now feel merely like havens from a sense of unease in the rest of your life, because for those types of things to actually be fulfilling, you need to be on strong ground in the rest of your life.

So, what can you do about this?

Truth #2: Putting basic life needs first and putting effort into making them as strong as possible makes exploration and fulfillment of higher needs (and the whole of a person’s life) much more fulfilling.

Simply put, you start with the basics. You put other matters in your life into the backseat for the moment and you fix the problem.

This is where the idea of a “financial turnaround” comes from.

When I described my pre-turnaround life earlier in this article, I was feeling a deep unease about my life, and it was only through addressing more fundamental needs – security and safety being a big part of it, but also simply ensuring I had steady sources of food and shelter for me and my family – that I was able to resolve that sense of unease. I was extremely lucky not to have everything crash under me. Instead, I just felt rumblings that came from being on very unsteady ground and I was able to take action before the whole hierarchy of needs came tumbling down.

That sense of unease in my life was only resolved when I put aside all of my higher “needs” related to self-actualization and got down to the important work of ensuring the stability and security of my life going forward.

So, let’s turn the tables. What exactly do you do if you’re feeling a sense of broader unhappiness and unease in your life? The first step is to spend some time really evaluating those basic elements of your life, starting from the ground up, as mentioned above. Be deeply honest with yourself about these things. Don’t be afraid to sharply criticize yourself, because it’s only through admitting that something is wrong or that something isn’t how you want it to be that you can begin to fix it.

As listed above, look at things like your current financial state, your level of debt, your retirement savings, your health, your weight, your sense of feeling physically good, your energy levels, the safety and security of your day to day life, and the strength of your most valuable relationships. Are those things in really good shape? Can you say that honestly and sincerely?

Once you’ve found some weak points, and almost everyone will, you need to come up with a plan to fix those points. The Simple Dollar largely focuses on strategies for fixing financial situations, but you can find help with almost all of those other core problems, too.

While you’re doing that, put some of your other life issues on hold or at least downgrade their importance. When the foundations of your life are on shaky ground, it’s time to stop spending several hours a day reading websites or watching television. You need to be putting effort into building a firm foundation so that you can actually do the things you want to do with joy.

This touches directly on the next truth.

Truth #3: If fulfilling a higher level need undermines a lower level need, you’re probably making a mistake.

In modern life, we often find ourselves mostly thinking about our highest level needs – our self-esteem and self-actualization. Do we have a good community or professional reputation? Do we have hobbies and other things going on in our life that engage us and interest us? Those are wonderful and important questions to answer.

However, sometimes in the process of answering those questions, we directly undermine those lower level questions. We spend too much on our hobbies in a chase for self-actualization. We spend too much on a shiny car or a nice work wardrobe in a chase for self-esteem.

Again, there’s nothing wrong with those steps on their own, but nothing in your life exists in a bubble. The thing to remember is this: every time you give some of your life’s resources to those higher level needs, you’re not giving those same resources to lower level needs. You’re assuming that those lower level needs are thoroughly taken care of.

The problems come in when those lower level needs aren’t fully taken care of. If you feel like you’re walking a financial tightrope in your life and you’re still spending money on comparatively unnecessary things, you’re undermining your basic needs and, on some deep level, it probably feels wrong. The same is true if you’re eating really tasty but unhealthy foods (a self-actualization thing) but undermining your basic health (a very basic need).

If you’re taking actions for fun and personal pleasure that are undermining the basic needs of your life, stop. Put them on hold. Get the basics of your life straight first. Otherwise, you’re just filling up the pleasures of life with a lot of guilt and uncertainty and sadness.

Truth #4: Money is strongly tied to very basic levels of need, including safety, security, and basic physiological needs.

Money, because it can be exchanged for a lot of things in life, plays a key role in all of this. You can use money to take care of your most basic needs – food, shelter, clothing. You can use it to give yourself some long-term security by saving for retirement. You can use it (to a degree) to help you build relationships, to build your self-esteem, and to help you explore your interests and passions. Money is a part of all of these levels.

The reason most people get into financial trouble is that they route their money poorly amongst those different levels. They spend too much on interests and passions and not enough on long-term personal security. They prioritize today’s shiny car – something near the top of the pyramid – over saving for retirement – near the bottom of the pyramid.

That, to me, is the beauty of personal finance. We have a lot of freedom with regards to how we use our money and because of that, we really can build the kind of life that we want. The catch, of course, is that we have to have the self-awareness to realize that a huge part of building that life that we want is having a strong foundation underneath it. We need to be secure in those core things, that we have food on our plate and shelter over our heads and basic clothes on our back and will be able to continue to do those things for quite a while.

All of these things add up to a single, final truth.

Truth #5: Making sure your money needs are taken care of provides a strong foundation for self-esteem and self-actualization, and thus enjoyment of modern life.

If my financial turnaround taught me one thing, it’s this: Things like self-esteem and hobbies and personal interests are deeply undermined if your finances are in disarray. You can still somewhat enjoy them, but it’s an enjoyment that’s constantly undermined by the stress and worry that comes with not having your life’s basics in order.

When you do have the basics in order, when you do have a firm grasp on your debts and you’re spending less than you earn and you’re beginning to build some long term financial security in order to ensure that you will have food on the table and a roof over your head and clothing on your back for quite a while, no matter what happens, there is a huge amount of stress and worry and distraction that just evaporates from your life.

When that stress and worry and distraction leave, it becomes so much easier to enjoy those higher level things. You can focus on them and deeply enjoy them without worry and stress undermining things in your life.

With that, I’m going to close with a little comparative story between my life now and my life then.

I’ve always been a deep lover of reading and learning and one of my biggest off-and-on interests has been the philosophy of self-reliance. Writers like Seneca and Marcus Aurelius and Henry David Thoreau and Ralph Waldo Emerson have had an enormous impact in my life.

During the times in my life when I’ve allowed the basics of my life to go astray, I was completely unable to get into the mindset to enjoy those books and essays. I’d read them, but nothing would click. I couldn’t do it. I couldn’t focus enough.

As I close this article, the very next thing I’m going to do is spend about an hour reading a collection of Emerson essays with my children piled around me reading their own books. This group reading time is something of a family tradition. Perhaps more than ever before, I can get thoughtfully lost in those writings. Why? My foundations are secure, and because of that security I can enjoy my hobbies and passions and relationships with a deepness and richness that I couldn’t achieve before.

Good luck.

Trent Hamm
Trent Hamm
Founder of The Simple Dollar

Trent Hamm founded The Simple Dollar in 2006 after developing innovative financial strategies to get out of debt. Since then, he’s written three books (published by Simon & Schuster and Financial Times Press), contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.

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