What does money mean to you? A recent poll showed that Americans now value money more than patriotism, religion, community, or children — a shocking trend that’s been materializing since at least the late 1990s. As American trust in institutions has declined, some people seem to be turning to money as an anchor in the storm, something with seemingly certain value in an uncertain world. In fact, 69% of Gen Zs believe “money can buy happiness.” But as ever, money won’t make us fully happy — and it certainly won’t lead to a purposeful and flourishing existence. In fact, an improper relationship with money, one of attachment without enjoyment, can deeply handicap a person’s attempt to live a deep, meaningful life. My book, the HBR Guide to Crafting Your Purpose, examines how we lack purpose and meaning today and identifies a path we can follow to flourish. Sadly, many people turn to money as a substitute for meaning. But while money may be easy to measure, meaning is not. It’s critical that those who want to flourish and craft lives of purpose develop a proper relationship with and attitude toward money. I suggest following these principles with the acronym RICHES: relegate, invest, choose, help, earn, and save. Relegate money to its proper place. Money has been essential to civilization since it first arose among our ancestors. Its absence can create great hardship. But its presence doesn’t always create a good life. The idea that more money makes a happier life may be accurate up to a point, but quickly, the benefits money provides are as numerous as the problems it creates, depending on the person. A “hedonic adaptation” process means that we quickly adapt to new levels of wealth, and those new levels don’t create more happiness. Money is an incredible tool, but it shouldn’t be a goal in itself. The concept that money should serve us and we shouldn’t serve it is incredibly simple but also remarkably difficult to remember in a world that so often measures success in large homes, sports cars, and sophisticated technology. To flourish, relegate money to its proper place in your life. Money can’t buy happiness, and focusing on it too much can actually be detrimental to your sense of purpose. If you find yourself seeking meaning through money, reflect on ways to deprioritize it in your life and make sure you’re not sacrificing those things which are more important — relationships, meaningful work, service to others — in its pursuit. Invest for impact. The modern ESG movement, which has been the core of modern “values-based investing,” has recently faced a variety of criticisms — ranging from accusations of greenwashing to emerging evidence of financial underperformance and ideological critiques to name a few. Still, the idea that we should align all our resources with our values is ancient, resilient, and true. The Torah, the Christian Bible, the Quran, and Hindu scriptures all talk about how we should align our stewardship of wealth with our values. ESG is one modern manifestation of that, but not the only one. Billions of people are now aware that their savings can be invested for good, with 86% of Millennials interested in “impact investing,” and 72% of Gen Zs hopeful that investing can improve sustainability. There are now a wide variety of ways to live our values through investing, and firms and technologies to make that easier. Whether through screening (positive and negative), proxy voting, corporate engagement, or conventional impact investing, we have thousands of choices to align our investments (at least somewhat) with our values. And we can often do so with little to no impact on our financial returns. Investing in this way can be a source of joy and purpose, and can contribute meaningfully to positive change in the world. Choose experiences, not stuff. A basic principle of financial flourishing is spending less than you make. But if I had to choose another, it would be this: Spend your money on experiences, not objects. There is ample research supporting this precept. Material possessions have been associated with decreased well-being when they result in comparison (e.g., trying to buy a nicer watch or car than your neighbor). But experiences (trips, outings, and other activities) are associated with increased well-being — particularly those experiences that open us to new things and are shared with others. Rather than spending money on a more expensive car, consider investing in a vacation with friends to a new and exotic place. Rather than purchasing a pricey watch, do a service trip with a significant other or your family that can expose you to new things while allowing you to serve others. Help others. Whether you have a lot expendable income or a little, the most fulfilling thing you can do with your wealth is give generously and serve others. In 2013 nine psychologists published a paper with a landmark finding: “Human beings around the world derive emotional benefits from using their financial resources to help others.” Evaluating data from 136 countries, they found that “prosocial spending is associated with greater happiness around the world, in poor and rich countries alike.” This paper has since been complemented by several others emphasizing the increased well-being associated with generosity — even apart from its obvious social good. One way to start here is to create a donor advised fund, and begin putting a percentage of your income into it each month. This could be as little as 1% of what you make or $20, but consistency is important. This will make giving a habit, and offer you and your loved ones the opportunity to collaborate on giving together. As your financial wealth expands and you are able to do so, increase the percentage. And apart from your charitable giving, remember (per the prior point), when you spend money, think about doing so to create experiences that help friends and family as well. Earn with purpose. When I coauthored my first book, Passion and Purpose, one of our core findings was that two of the top three reasons people chose jobs were an intellectual challenge and an opportunity to impact the world. When I started working, though, I convinced myself I could do anything for a while to create financial freedom, and I was wrong. To experience both success and significance throughout your life, you need to craft a purposeful career. And while that career needs to pay enough to meet your needs outside of work, once those needs are met, and you’re able to save a bit for the future, the smartest thing you can do is work with purpose. It’d be naïve to ignore financial necessities entirely when choosing a job. If you need to take a job for the money, by all means, do. But if you have the financial freedom to do so, opt for a job with great people, with a mission worth achieving, with autonomy and responsibility, and where you can craft meaning into all you do. Those things will matter more than the incremental money you’ve sacrificed, and chances are you’ll end up better at a career that brings you joy. Save for freedom, not retirement. For decades, one of the primary goals of people throughout the Western world has been retirement. But retirement may be the wrong goal. There is little evidence that retirement improves life and a lot of evidence that the wrong kind of retirement can have adverse social and psychological effects. One U.K. study has linked retirement to increased mortality, and in the U.S., it’s been linked with rapid cognitive decline. As noted earlier, we are designed to need purpose and meaning in our lives — much of which comes from our work and our communities. As we age, we certainly may need to have money saved to allow for failing health or a need to work less. But for most people, full retirement isn’t the right choice. Instead, the goal of savings should be freedom — to work the way we want until the age we want, without the constraint of financial need. Viewed this way, we may still contribute to our retirement plans, but we do so to buy freedom and purpose, not leisure. And if we experience some life-changing liquidity event in our 30s and 40s, we’ll have the insight to know that money should mean more than life on the golf course or the beach. Instead, it’s the license to lean harder into meaningful work for those around us. Many in Gen Z get this, with 41% preferring a “second act” to full retirement, but there’s still a lot of emphasis across generations on “finishing” work rather than buying the freedom to work with meaning. Overcoming that is key to financial and professional flourishing. Building a financial life for flourishing is about putting money in its proper place, crafting lives of meaningful work, giving generously to others, indulging in life-changing experiences with friends and family, and stewarding our wealth to impact the world positively. It’s about sharing this perspective with those around us and living in community with others. Money can’t buy happiness, but adopting the right mindsets and values about money can be foundational to living with greater purpose and meaning.
