I was reading about what psychology has to say about happiness and found some very interesting tidbits. The following is what I think was the best parts. It's a bit wordy and long, but I think it's worth it.

Which life circumstances change our happiness level and which don’t?
Here is some important research we need to know:
Relationships--a close, lasting, caring love relationship is for many a wellspring of happiness. Having good friends also gives most people continuing pleasure, too. A quarrelsome relationship can be the cause of much lasting unhappiness. Being lonesome continues to be unpleasant year after year. Maintaining a loving partnership is one of the surest way to happiness—40% of married people say they are “very happy” (that is a little higher than the usual estimates). Only 25% of unmarried, divorced, separated and widowed say they are “very happy.” Remember they have suffered a significant loss.

Religion--religious people tend to be a little happier and more satisfied with life. And why not, since they have a relationship with God, maybe a special sense of purpose, the promise of a wonderful life after death, and a facilitated social life? The more fundamentalist the religion, the more optimistic the believers tend to be, and the higher level of hope they tend to have.

Money—while, in general, people living in a wealthy, free country are clearly happier than people in a poor country, making a lot of money is usually an ineffective way to achieve happiness. In fact, once we get into a materialistic mode of acquiring “things,” the result is often less happiness, maybe even compulsiveness, competitiveness, boredom, or meaninglessness in the long haul.

Negative feelings--one might think that avoiding negative emotions and situations might make our lives happier, i.e., filled with more joy, but that is not necessarily true. Some people don’t have many feelings, positive or negative. Other people have lots of negative feelings and lots of positive feelings. Indeed, women have about twice as much depression as men…and they have about twice as much joy. So, holding down or escaping unpleasant feelings might help a little to be happy but it isn’t a sure-fire powerful tool.
Most other situations in life have relatively little to do with happiness. That includes age, health, degree of education, climate you live in, race, and gender. You can’t change most of these things anyway. Thus, it is easy to see that gaining happiness by changing your circumstances is a hard way to go. Only 25% or so of us achieve a really good, lasting, loving relationship. Perhaps only 10% or 15% of us worldwide can arrange to live in a wealthy democracy. Getting religion if you don’t have it is hard, it can’t be forced. Likewise, reducing negative feelings requires psychological skills and methods.
A
little summary: According to Seligman the role of circumstances in happiness is quite limited: education, income, and climate don't influence happiness very much; feeling healthy, avoiding trauma, and developing hope through religion only contribute moderately to happiness; however, important life conditions include achieving a good marriage and living in a wealthy democracy. OK, but what about other life circumstances, such as raising a healthy, happy family? Having a successful career one is very proud of? Living an altruistic life devoted to helping others? What about being the best mechanic or a loved teacher in your town for 50 years?
More promising routes to happiness

Seligman obviously doesn’t think “trying to change your circumstances” is the best way to become happy. Instead, developing new personality traits, different outlooks, and more positive attitudes offer more hope because they may be more under your voluntary control.

Starting from the great virtues identified by philosophers over the last 5000 years, such as wisdom, courage, love, justice, temperance and transcendence, Seligman tries to help each person discover their own unique strengths or virtues. He calls these individual traits your “signature strengths.” Much of his book focuses on teaching you to nurture your positive natural traits or virtues, so you can live “the good life” and experience authentic happiness in work, love, and child rearing. To his credit, he has also developed a Web site (http://www.authentichappiness.org) which supplements his book. The site offers rating scales which are automatically scored, explained, and stored in your personal test folder. The ratings measure and provide norms for several of your traits or characteristics, such as your Signature Strengths (listed later), happiness, positive and negative feelings, optimism, close relationships, and so on.
The Interaction of Happiness and Depression
It is commonly thought that happiness is the positive end of the depression scale. Of course, in the extremes, great happiness and deep depression are mutually exclusive; you can hardly be in the depths of suicidal depression and be considered happy at the same time. But in the less extreme ranges, happiness and depression appear to be rather independent of each other. It is very interesting that psychologists consistently find women in general are more depressed than men, but psychological tests also show men and women are equally happy. This clearly shows that happiness is not just the opposite of depression (Myers, 1992). This also fits with common sense about happiness. That is, people know they can go out and have a good time at a party, then come home to be lonely and miserable again. Another example: you can handle some situation that is causing you to be very unhappy, but that accomplishment may not produce much happiness, just relief from the pain. You can be unhappy about some things and happy about others at the same time, much like you can both love and hate a person at the same time (Swanbrow, 1989; Diener, Sandvik, & Pavot, 1990). In contrast, you can't be both relaxed and anxious at the same time.

We are learning more about happiness. One interesting point is that happy people tend to be decisive, healthy, creative, motivated, social, trusting, and caring, compared to unhappy people. Another is that they feel "in control" and/or have a sense of well being. As you might expect, happy people have more faith in a "higher power" than unhappy people. Among atheists and non-religious, only about 15%-30% claim to be "very happy." Among religious folks, 25% to 40% say they are "very happy." A religion helps us handle great losses (probably due to the concept of eternal life), but religious people sometimes feel less in personal control (Myers, 1992)

In some cases, however, religion reinforces feelings of guilt and the person becomes a martyr who feels he/she deserves punishment or needs to endure unhappiness. They may feel so unworthy that life only has meaning if they suffer great hardship and pain. Others think they do not deserve to feel good; thus, if life is going well for them, they quickly find a problem to feel badly about (see later discussion of shame and guilt). Such people focus on the seriousness of life. Overall, however, to most people religion probably gives more satisfaction than grief.