Money is important, but how much do you need?

Money is not everything, but money is something very important. Beyond the basic needs, money helps us achieve our life's goals and supports — the things we care about most deeply — family, education, health care, charity, adventure and fun. It helps us get some of life's intangibles — freedom or independence, the opportunity to make the most of our skills and talents, the ability to choose our own course in life, financial security. With money, much good can be done and much unnecessary suffering avoided or eliminated.

But, money has its own limitations too. It can give us the time to appreciate the simple things in life more fully, but not the spirit of innocence and wonder necessary to do so. Money can give us the time to develop our gifts and talents, but not the courage and discipline to do so.

Money can give us the power to make a difference in the lives of others, but not the desire to do so. It can give us the time to develop and nurture our relationships, but not the love and caring necessary to do so. It can just as easily make us jaded, escapist, selfish, and lonely. How much do you need? What is it going to cost you to get it? It is keeping these two questions in mind that gives us a true sense of money's relationship to happiness. If we have less than what we need, or if what we have is costing us too much, we can never be happy. We need money to eat, sleep, dress, work, play, relate, heal, move about, and enjoy comforts. We should remember in choosing our style that it comes with a price tag.

Evidence of the psychological and spiritual poverty of the rich and famous fills our newspapers, magazines, tabloids, and television programmes and hardly needs repeating here. "We always think if we just had a little bit more money, we'd be happier," says Catherine Sanderson, a psychology professor at Amherst College, "but when we get there, we're not." "Once you get basic human needs met, a lot more money doesn't make a lot more happiness," notes Dan Gilbert, a psychology professor at Harvard University and the author of the new book Stumbling on Happiness .

Yes, we get a thrill at first from expensive things. But we soon get used to them, a state of running in place that economists call the 'hedonic treadmill'. The problem is not money, it's us. For deep-seated psychological reasons, when it comes to spending money, we tend to value goods over experiences.

Money can help us find more happiness, so long as we know just what we can and cannot expect from it. Many researches suggest that seeking the good life at a store is an expensive exercise in futility. Money can buy us some happiness, but only if we spend our money properly. We should buy memories.

How much money it costs is not the issue, but how much the money costs us is important. Money should not cost us our soul, relationships, dignity, health, intelligence and joy in simple things of life. People who figure out what they truly value and then align their money with those values have the strongest sense of financial and personal well-being.