Money can't buy happiness, but how we adjust 3 financial 'levers' can drastically affect how we feel

• Research shows that outside of genetics, more of our happiness is determined by factors we can control than factors we can't.
• When it comes to our money, we have control over how much we earn, spend, and save or invest.
• Adjusting these inputs can make a big difference in financial security and achieving goals.

During any economic downturn, financial experts tend to preach a similar sermon: Focus on what you can control.

For me, that message conjures an image of my money life as a machine with three separate levers.

One lever is labeled "earning," which is income and any bonuses or other windfalls I may receive, such as a tax refund. Another is "spending," which is all the outgoing cash that covers bills and other expenses. Finally, there's "saving and investing" — I lump these two together because they serve the same purpose: to build wealth.

Just about everything I do with my money falls into one of these categories. Taken together, they present a clear picture of where I stand and where I'm headed.

Thinking of my money in this way — as a machine with levers I can move up or down to align with my values and meet my goals — reinforces an unmistakable truth: I have control.

Up to 40% of our happiness is controllable, research shows

According to the American Psychological Association, nearly two in three adults say money is a significant source of stress in their lives. While financial stress is present for Americans at all income levels, it's highest among those earning below $50,000 a year, the data showed.

When things are going badly, financially or otherwise, we often point the blame at outside factors. To some degree, that's fair. The COVID-19 pandemic, for example, is broadly responsible for millions of lost jobs and further economic pain. In the US, generations of systemic racism have created an enormous and overwhelming racial wealth gap, not to mention a gender pay and wealth gap. The financial playing field isn't level by any means.

These are real challenges supported by data, and no one is expecting anyone to overcome them through willpower alone. However, when we talk about happiness, emotions don't always correlate with facts; two people in the same financial situation might feel entirely different about it.

In his book "The Geometry of Wealth," the behavioral-finance expert Brian Portnoy explains what drives our overall happiness in life, citing research by Sonja Lyubomirsky, a professor of psychology at the University of California, Riverside. To simplify, 50% of our happiness is attributable to genetic disposition, 40% is explained by our intentions, and 10% is determined by circumstance.

Ultimately only a slice of the overall makeup of our personal fulfillment is related to external factors — where we live, how we look, or what salary we earn, for instance. A much larger chunk is determined by what we do. That's good news, Portnoy says, because it means we as individuals hold some power to upgrade the hand we've been dealt.

"Conscious decision-making and deliberate action have material consequences for the quality of one's life experience," he writes. "Your choices of thought and action make a big difference."

Don't get stuck running in place

If you feel like your own money machine — your potential to earn, spend, or save — is locked in place, you're not alone.

"The scarcity mindset is a very prominent reality [among millennials]," Sunny Israni, a certified financial analyst and the founder and CEO of the personal-finance app Clasp, said during Business Insider's Master Your Money roundtable.

"Healthcare costs, rising education costs, rising housing costs, income levels being stagnant — there's no surprise as to why the scarcity mindset and this idea of just being bad with money is there, and that there are challenges in reprogramming yourself," Israni said.

Scarcity mindset is the idea that there isn't enough time, resources, wealth, or happiness to go around. It's fixating on what you don't have instead of using the tools you do have, or that are within reach.

Lyubomirsky's framework for happiness shows us that it is possible to flip the script and take charge.

How to adjust the levers of your money machine

To adjust the levers of your money machine appropriately, you must have well-defined goals. A goal can be as simple as building a $5,000 emergency fund or as complex as retiring at age 60 and living on 80% of your preretirement income. In most cases, the objective is to save or invest more money.

To that end, one strategy is to shift down the spending lever — move to a cheaper city, eat out less often, cut the number of subscriptions you pay for, and so on. All else remaining equal, you'll free up cash. However, there is a limit when it comes to adjusting spending, the certified financial planner Eric Roberge says.

You can make an even bigger difference by increasing your income, he and his wife, Kali, said on an episode of their podcast "Beyond Finances." Cutting your expenses and daily spending takes continued effort — it's a short-term solution — while increasing your positive cash flow is a long-term solution, they said.

The earning lever is the one with an unlimited runway. Your spending can drop only to $0, which is unrealistic, and the amount you put toward savings and investments is limited to the difference between your income and expenses.

Portnoy adds that there are, of course, limits to what we can and cannot achieve through sheer willpower. Our ability to control the situation before us has boundaries. It's highly unlikely you'll become a billionaire in your lifetime on a steady $80,000 salary. But through careful planning, mindfulness, and resilience, there is hope for an improved reality — or at least, one that you feel better about.