After you have filled out the PEACE template, put it aside for a few days and then go back to it to answer the questions at the bottom of the template:
The importance of Step 2 is to bring more precision and specificity to your definition of happiness.
The method suggests 5 elements (PEACE) that range from the psychological, abstract and universal to the physical, concrete and individual. You may or may not identify with these elements; you may add other elements or substitute some for others. The important thing is that you begin to reflect for yourself on what happiness may be, achieve some insight, clarity and precision and move away from vague undefined notions of happiness. Also, your evolving definition of happiness may uncover some incompatibilities that may in themselves block or hinder experiences of happiness. In other words, these discrepancies may be non-conducive to happiness, and some adjustments may be required to make your definition of happiness conducive to the actual experience of happiness.
Give sufficient time to Step 2; reflect on your definition of happiness, and then move on to the next Step, Knowing myself.