Laura Vanderkam offers a total rethink about financial planning in her new book, All the Money in the World: What the Happiest People Know about Getting and Spending. Every dollar is a choice, she says. So when you think more broadly about how you spend it, you’ll find that money can buy happiness. The Allstate Blog caught up with Vanderkam to talk about money and happiness (part one in a series; part two, Don't Let Your Emotions Get the Best of Your Finances), why extreme couponing might be a waste of time, and why you should keep on enjoying those morning lattes.

ALLSTATE BLOG: Many personal finance books focus on the tiny expenditures that take a cut out of budgets. But you tell people to keep those small indulgences and, instead, scale back the big-ticket items. 

VANDERKAM: Small indulgences have an outsized effect on happiness. Buying a house and buying a latte will both make you happy when they come into your possession, but you only buy a house once every few years (or decades). You can buy a latte three times a week, and you’ll enjoy it every time. When it comes to happiness, the general thrust of the research is that frequency trumps intensity.

AB: So, lattes trump McMansions?

V: A house, a fancy car, or expensive furniture certainly make you happy when you buy these objects. But then you adapt to them. Happiness research is finding that variability forestalls adaptation. That’s one reason that travel, and getting together with friends, tends to make people happier than their furniture. Furniture is always the same. Every trip is a new adventure.

AB: You also say that, rather than spending loads of time scrimping (extreme couponers come to mind), people should invest time in earning more. So … more work makes us happier? V: Work can make you happy if you choose the right kind of work. These days, many people moonlight by doing something creative—the thousands of merchants on Etsy and Zazzle come to mind. But even if you like nothing more than sitting on the sofa watching TV, people change jobs pretty frequently these days. Positioning yourself to get a higher salary at your next job means you can spend less time hunting around for discarded coupon circulars and more time watching your shows. AB: And then there’s your take on retirement … the idea that the allure isn’t about “not working” but a result of people’s dissatisfaction with their current work. V: If you’ve been stuck in the grind for years in a job you don’t like, the lure of retirement is freedom. But a better question than the exact day you want to retire is what kind of work you’d enjoy so much that you’d never want to retire from it. What if your gig was something part-time and flexible? What if it tapped your hobbies? And then, here’s the real question: how can you get into some kind of job that looks a lot like that now? You don’t have to wait until age 65 to live your dreams. AB: Love that. You also suggest couples look at expenditures as a series of choices (like a spendy diamond engagement ring vs. 100 date nights after you’re married). V: When you’re in the middle of planning your nuptials, it seems very important that you get the details right. It’s hard to picture yourself, 10 years hence, exhausted from work and caring for three children under the age of six. So the fact that the amount of money you’re about to blow on a wedding reception could pay for a cleaning service for years never enters your mind. One way to try to think long-term is to talk to couples who’ve been together for 10 to 20 years about what ways they think money could have made their lives easier during that time. Then, go ahead and plan a great wedding. But start saving some money, too, for those life enhancers older couples tell you about. AB: What advice do you have for people who are finding it a rough go in this economy? V: A key skill people need to learn in this economy is how to be entrepreneurial. We can no longer count on somebody giving us jobs. Often, we have to make our own. This involves asking several questions: what skills do I have, or could I learn? Which of these will people pay me for? How do I find those people?

AB: So, what’s in your joy budget?

V: These days, I buy more lattes. I buy more flowers. I try to get together with friends and “make a fuss” for social occasions. But we spend less than we could in other areas that don’t make us as happy, like clothes. While I was writing All the Money in the World, we actually moved from New York to Pennsylvania, in part for the lower cost of living. Splurging on what makes you happy, and scrimping everywhere else sounds pretty smart to me.

AB: To us too. Thanks for chatting.

Photo: Michael Falco

Soon-to-be seniors searching for retirement homes may have trouble knowing where to start. Though many communities promote the fun side of senior living—game nights, shopping trips and, in some cases, on-site spas—there are serious considerations to make when choosing where to spend your retirement years, or when helping a parent decide where to spend theirs. With so much to think about, planning for senior living early can be beneficial in the long run. According to the National Clearinghouse for Long-Term Care Information, about 70 percent of adults over 65 require some form of long-term care services. Seeing as people’s need for care increases with age, it’s important to start thinking about retirement living even a few years before retirement. Use these tips to help you find a senior living community that suits your (or your parents’) future needs:

1. Choose Your Standard of Care

Visiting a variety of retirement homes can help you picture your ideal community—and which ones you’d like to avoid. When touring a facility, take note of the interactions around you and look for signs of elder abuse: Are on-staff nurses or visiting practitioners available when you need them? Is the facility clean, well maintained and lined with handrails? Do caregivers interact well with residents? It’s also important to consider the level of assistance the community provides. While independent living is important in the early stages of retirement, you may find yourself seeking additional help as the years pass. Continuing care retirement communities, which combine independent living, assisted living and nursing home facilities, can make this transition a bit easier. These communities allow residents to prepare for their future and receive proper treatment for health issues later on—without having to change homes a number of times. Assessing your health prior to choosing a facility can help you avoid expensive health fees not included in basic retirement care

2. Seek Third-Party Information

Even if your facility tour is pleasant, it’s important to take a deeper look. If time allows, sit down with a resident and discuss his or her experience. Have a meal in the cafeteria. Ask questions about the facility and get a feel for daily life there. Aside from first-hand impressions, consult resources like the Better Business Bureau^® and Eldercare Locator, which offer great planning and searching tips, and link to records of complaints or legal actions made against specific facilities. Medicare also offers an online system, complete with details on quality ratings, health inspections and comparisons of different nursing homes in your area.

3. Consider Safety Essential

Feeling secure is just as important in a retirement home as in any other residence. Make sure to ask whether facilities offer 24-hour security personnel and surveillance of surrounding areas. Check for locks on windows and doors and see if safety deposit boxes for valuables are located on-site.

4. Make Sure Your Money’s Secure

Moving into a retirement home is a major financial investment. According to the latest Assisted Living Facility Profile, published by the National Center for Assisted Living, the average cost of a private unit is $3,022 per month, which adds up to $36,264 per year. See what measures are in place to protect your finances while in residence—and ask what would happen should your funds run dry.

5. Take a Second Look

Don’t forget to double-check documents that need to be signed before moving in. A number of elder care attorneys offer services to help new residents navigate legal documents. Not all contracts are the same, so it’s important to understand the basic costs, along with what residents are expected to pay for additional services and health care.

Life insurance may be one of the most important purchases you’ll ever make, but it can be overwhelming. Previously, registered members of the Good Hands^SM Community were able to submit questions to someone who knows the ins and outs of life insurance. Watch exclusive interviews with Matt Easley, Vice President of Financial Products at Allstate Life Insurance Company to find out:

Life insurance may be one of the most important purchases you’ll ever make, but figuring out how much, what kind to buy, and how the different stages in your life and life events can affect your insurance needs, can be overwhelming. Here's your opportunity to ask a question of someone who knows the ins and outs of life insurance. The Good Hands^SM Community will be hosting an exclusive interview with Matt Easley , Vice President of Financial Products at Allstate Life Insurance Company. Submit a question by September 22 in the Comments section below and your question could be asked and answered. Check back in October to watch the interview. Related Links

• Life Insurance - Reasons to Consider It
• Investing in Life Insurance