The secret to long-term creative happiness without winning the lottery

It's a common thing to speculate how we would spend a million pounds if we won the lottery. We might buy a house in the country, a flashy car or a wardrobe full of designer clothes. But most of all, we dream about the freedom money would bring.

The chance to ditch our jobs or freelance projects, and do our own thing. We could finally learn how to paint. Or perhaps go travelling to indulge in our travel photography aspirations. We could see the world and live our wildest dreams!

But actually, you don't have to win the lottery to achieve that freedom or make those dreams come true. It's an illusion that money brings happiness. We can be happy right now with what we've already got. How? Here is the secret to long-term creative happiness without winning the lottery...

Keep the overheads low

It goes without saying really – but the more expenses you have, the harder you'll have to work. To enjoy some financial freedom, take the pressure off and keep overheads low. This means steering clear of things you don't need, like an expensive gym membership, indulgent holidays or a 'posh' car.

If you run a business, ask yourself whether you can put up with working from home and save on office costs. And if you think a client wants to see you in a flashy car, you'd be wrong! Your skills should be the only thing that prove your ability.

The aim here is to reduce your overheads as much as possible, so you don't have to work extra hard to fund your lifestyle.

Imagine only having to work two days a week to cover your costs and have a little extra for savings and fun! Sounds too good to be true right? Wrong! It's entirely possible. You just have to become self-disciplined and avoid unnecessary expenditure.

Indulge in 'stealth wealth'

So you're doing really well with the old freelancing and you're pretty keen to spend that hard-earned cash on 'nice things'. You've had what you consider to be 'naff' stuff for some time and you feel you now deserve better stuff. My advice? Don't bother! Don't fall into the trap of showing off your success by buying more and more stuff and upgrading to high-end purchases, as you'll only be throwing yourself on to an endless treadmill to finance your new lifestyle.

So what if you drive a five-year-old Fiat Punto? It gets you from A to B, you paid for it outright and your outgoings on petrol are minimal. Who cares if your handbag is from Topshop and not from Mulberry – too many girls carry those things around these days anyway! Avoid being dragged down by temptation and instead see the wood for the trees!

Only buy what you need

There is a huge difference between what we want and what we need. Always keep this in mind when considering purchases. Whether you're thinking about some new glasses (do 'Armani' really have better specs than the standard ones?), a new car (a sports car might be lovely, but can a smaller hatchback suffice?) or a new home (do you really need to cripple yourself with a bigger mortgage on a large house that you don't need?) – always take a step back and consider if you can live with only what you need – which is often the cheaper option.

Avoid taking out credit and pay off those debts

Debts make us miserable. They hang over our heads like thunderclouds. We lie awake at night worrying about them. If you've got debts, get rid of them – or put together a solid plan that pays them off chunk by chunk, as soon as possible.

If you're thinking about taking out a loan or using a credit card to purchase that 'thing' – don't bother! The happiness of buying that item will only be temporary, and then you'll be left with the stress and misery of paying off the debt.

Small is the new big

When it comes to property, small is truly a magic word. It's something that I hold dear to my heart after going through a few personal experiences myself. I've realised that having a 'big' home doesn't make me happy. When I first leapt onto the property ladder eight years ago, I excitedly bought a large three-bedroom home (in a cheap area) that we didn't need. There was so much space and a huge garden that we hadn't quite prepared ourselves for the maintenance and upkeep of the place. Saturdays were spent house cleaning, DIY'ing or managing the garden. And in the five years that we lived there, we just filled it up with 'stuff' that we didn't need. It became a huge burden on our young shoulders.

Realising our mistake, we sold our house and moved to smaller space in the city. We got rid of a lot of stuff (charity shops and eBay) and we downsized our entire lives. Now we hardly have any housework, we don't have a garden to argue about and because we have more time (and more money) we are able to spend more time on doing stuff.

Check out the Tiny House Blog for some downsizing and small living inspiration. It might seem a little extreme and I'm not suggesting you move into a tiny cabin – but you can certainly enjoy the sentiments of their posts. And for 'small living' decoration ideas, you can't beat my favourite: Apartment Therapy.

Less stuff makes us happy

It's been proven that 'stuff' makes us miserable. The more we have, the more we feel tied down and overwhelmed. That's why we always feel great when we have a good sort-out or spring clean. We feel like the weight has been lifted off our shoulders when we declutter.

With this in mind, stop buying more 'stuff' to add to what you already have. Instead – focus on reducing what you own by giving things away to friends and charity shops or selling things via eBay or car boot sales. You'll feel a sense of relief when you slim down on stuff you don't need.

I love the following TED Talk by Graham Hill called 'Less Stuff, More Happiness', which looks at why having more things can lead to debt, stress and a larger carbon footprint.

Splurge on experiences, not 'things'

If you really have to spend money, make sure you do so on experiences rather than things. Because things, as I've explained before, only make us unhappy. They weigh us down and make us miserable. Buying things certainly gives us an emotional boost short-term, but essentially – it's the experiences, the things we do that make a real difference to our lives.

Going out for meals, seeing a movie, watching a sporting event, going to a gig or concert, enjoying nice holidays – these are all the things we should be spending our money on. They build happy memories and strengthen relationships. Even better – a lot of things are free! Think of art galleries, picnics, playing frisbee in your local park – and you can see why commercialism isn't the route to happiness.

Save, and save some more

There has been loads of research to suggest that money in the bank makes us happy, so put aside savings every month. It's peace of mind and offers an essential safety net should anything go wrong.

Without savings, you might feel like you're in a constant high state of alert – always worrying about money and when the next payments are coming in. If you haven't already done so, talk to your bank manager and set up a savings account.

So to recap: less stuff, fewer overheads and no debt means we have more time to do the things you love, reduce stress and even work less hours. Even better, you can reduce your carbon footprint and save the world!