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Financial Tip

According to the Internal Revenue Service (IRS) you should keep your supporting documentation for at least three years. More information on what you should keep and for how long can be found in IRS Publication 17.

Some things to consider:

• W-2, Wage and Tax Statement or 1099 Form (for independent contractors);

• Bank and brokerage statements for an end-of-the year accounting of earned interest or stock earnings, life insurance policies that have a cash value or investment component;

• Receipts, credit card bills or canceled checks for expenses such as mortgage interest, real estate taxes, alimony or child care; and,

• Written acknowledgements from donations to charitable organizations. This information should be stored in a safe place, such as a safety deposit box. Also, keep an inventory list of your records in another safe place.

For Real Happiness, Focus on Experiences, Not Things

Can material possessions bring you happiness? Yes, but only up to a point. For true happiness, research suggests we should consider spending our discretionary income on experiences rather than possessions.

A collection of recent psychological studies by researchers at Cornell University reveal that experiences - sometimes even unpleasant ones - are later valued more than material possessions. Why? Because although buying the latest gadget or snagging that cool designer outfit can bring us instant gratification, over time we take them for granted and the gratification fades.

Even though material possessions seem appealing since they may last longer than an experience, according to Dr. Thomas Gilovich - a psychology professor at Cornell - new things are only exciting and pleasing at first, while learning a new skill or traveling is more rewarding overall. Dr. Gilovich was recently quoted in Fast Company, saying "We buy things to make us happy and we succeed. But only for a while.

New things are exciting to us at first, but then we adapt to them." He added, "Our experiences are a bigger part of ourselves than our material goods. You can really like your material stuff. You can even think that part of your identity is connected to those things, but nonetheless they remain separate from you. In contrast, your experiences really are part of you. We are the sum total of our experiences."

In the September 2014 journal of Psychological Science, Dr. Gilovich and his colleagues, Dr. Killingsworth and Amit Kuman, discussed their research that showed "spending money on experiences provides more enduring happiness."

Their research showed that essentially, when you can't live in a moment, it's best to live in anticipation of an experience. They also noted that waiting for an experience apparently elicits more happiness and excitement than waiting for a material good. By contrast, waiting for a possession is more likely fraught with impatience than anticipation.

Wall Street Journal reporter Jonathan Clements is another supporter of investing in experiences versus things. In early 2015 he wrote that one reason experiences are a better investment is the fact that we have not only the event itself but also the anticipation before and the fond memories after. He says, "...and those memories aren't soiled by the messy reality of some object that gets dirty, breaks down and is eventually discarded."

It's important to remind ourselves that while spending money on experiences instead of material goods can provide us with greater long-term happiness, it's crucial to have a saving and investment plan in place first. Don't mistakenly put an expensive vacation you've always dreamed of at the top of your "To Do" list, just for the experience. Before you invest in any experience, make certain you have a clear financial strategy in place to make your dream a reality and to protect you if you were to lose your job or if the economy were to take a downturn.

Teachable Moments

Have a discussion with your teens about the difference between buying a cool trendy item and creating a memory they'll have for years as a result of a wonderful experience. Consider using a favorite family vacation as an example of a positive time in their life, and help them see how that is more memorable than the new clothes they simply had to have last year - and which may now be at the bottom of their closet.