IMAGINE AN IDEALIZED chart that summarizes our finances over the course of our lives. What would the chart look like? Picture these five lines:

Our nest egg grows, slowly at first and then ever faster, hitting a peak of around 12 times our final salary when we retire.
Our portfolio in our 20s stands at perhaps 90% or even 100% stocks. We dial down our allocation in the years that follow, especially during our final decade in the workforce,

SELF-DETERMINATION theory posits that we have three basic psychological needs: the need for competence, relatedness and autonomy. When these needs are satisfied, we’re more motivated and experience a greater sense of well-being.
To this, you might reasonably respond, “What the heck are you talking about?”
As I see it, self-determination theory provides a useful framework for thinking about the connection between money and happiness. We tend to be happier and more enthused about our daily lives if we’re engaged in activities we feel we’re good at (competence),

TO IMPROVE OUR behavior, we first need to realize we’re on the wrong path and then figure out the right way forward. Often, this isn’t especially difficult. If we have no savings, obviously we need to sock away some money. If we’re overweight, we should cut back on the calories. If we’re out of shape, we need to hit the gym.
Instead, the real problem is getting ourselves to act.

The contemplative side of our brain is fully aware we ought to eat and spend less,

MOST MONEY conversations, especially with financial advisors, orbit around the concept of increasing dollars.
When is it best to buy stocks? Answer: in a down economy. Reallocate money from bonds.
When is it best to buy bonds? Answer: in a thriving economy. Reallocate money from stocks.
When is it best to save? The answer invariably seems to be: always.
On the one hand, I embrace this concept. A chronic self-tither,

WHEN MY SISTER graduated from physicians’ assistant school earlier this year, I gave her a journal, the pretty, unmarked, paper-substantive kind that every female loves. Inside, I wrote five things that I wish I’d known, or am glad I knew, when I got my bachelor’s in 2006. Here was the first:
I’m gonna call it self-tithing. Ya know: Basically, what Mom and Dad taught us to give to the church, I’m telling you to give to yourself.

I HAVE NEVER BEEN under the illusion that happiness was a simple matter of more money and more material goods. But I did question where happiness could be found.
When I was young, I saw poverty at its most extreme in newly formed Bangladesh, where my family lived for four years during the 1970s. People struggled each day to stay alive and were lucky to find food and shelter.
As an adult traveling through Mexico,

WE’RE WORTH SO MUCH more than the value of our homes and our financial accounts. But how much more? Forget your car and household possessions. Unless you have a Chagall hanging in the living room, it’s safe to assume all this stuff will depreciate and eventually be worth little or nothing.
Instead, our three assets with potentially significant value are our regular paycheck, our Social Security retirement benefit and any traditional employer pension we’re entitled to.

TO BE PRUDENT managers of our own money, we need to read the small print—but we also need to keep an eye on the big picture.
To that end, whenever we make a financial decision, we should ponder three key questions: What’s the tradeoff, does the choice make sense given our broader financial life, and will we feel as good about the decision tomorrow as we do today?
Trading Off. Suppose we remodel the bathroom,

SPENDING DIDN’T always come easy to me. As a child, I had a small weekly allowance, the spending of which I carefully controlled. In boarding school, a treat for me was a Mars bar from the school “tuck shop”—a British term for a small candy store.
As I entered my mid-teens and started to earn my own money, more often than not it went into my savings account. Only when I turned 16, and had my first car,

I LIKE LEARNING from successful people. If you want to be good at something, why not hear from somebody who’s actually done it?
Back when it was first published, I read The Millionaire Next Door and became fascinated with these folks. Over the next couple of decades, I applied the book’s teachings and eventually reached millionaire status myself.
Along the way, I started writing about personal finance, combining my interest in millionaires with my passion for learning from experts.

MOST OF US WILL never be fabulously wealthy and we’ll never earn huge incomes. Self-help authors, get-rich-quick seminars and motivational speakers might try to convince us otherwise. But if we turn to these folks for assistance, they’re the ones who typically make heaps of money—at our expense.
Such hucksterism doesn’t just carry a short-term cost, however. It also causes us to think about our lives in the wrong way, leaving us with an unwarranted sense of failure and distracting us from the right path forward.

OUR STANDARD OF living has more than doubled over the past four decades. Has all that extra money bought happiness? Not a chance. In 1972, 30% of Americans described themselves as “very happy.” As of 2016, we’re still at 30%, according to the latest General Social Survey.
Over the 44 years, there was a slight uptick in those describing themselves as “pretty happy” and a tiny decline in those who said they were “not too happy,”

A FEW MONTHS AGO, my retirement account hit a milestone—$250,000. I’d been looking forward to achieving “quarter-millionaire” status for a while, so when it finally happened, I decided to announce it on social media. I took a photo of my computer screen, with the value of my account highlighted, and uploaded the photo. Just as I prepared to make the post public, I decided to obscure the actual balance and edit the text to say my account had reached a “new personal record,” instead of revealing the specific amount.

WE’RE USED TO SEEING money as one of life’s limiting factors. But if you receive a financial windfall, money may no longer be the limitation it once was. While that might sound liberating, it can also create anxiety. The reality is, constraints serve a useful purpose: They provide structure. Without that structure, you may find yourself feeling rudderless.
I experienced this when I received a windfall several years back. I remember walking into an Apple Store,

MANY EMPLOYEES deliberately have too much income tax withheld from their paycheck, so they receive a fat refund each spring. Federal refunds averaged $2,850 per income-tax return in 2014, the latest year for which data is available.
This is completely irrational and entirely sensible.
It’s irrational, because we’re making an interest-free loan to Uncle Sam. Why not have the correct amount of tax withheld, and then take a sliver of each paycheck and pop it in a high-yield savings account,