Life without challenges is little more than a procession of one menial tasks or event after another.  Challenges are what make things interesting and exciting.  They are one of the primary deterrents of boredom, and have the potential to be one of your biggest sources of motivation.  If you are working on overcoming a reasonable challenge, then chances are you are able to be focus, engaged, and have some kind of meaning in your life.  What more could you really ask for?

Indeed, challenges can be a source of great happiness.  They have the ability to give your actions both meaning and purpose.

Finding the right challenges
Not every challenge is created equal, and to find one that fits right with you can be a challenge in itself.  Give yourself a bigger challenge than you can handle are you are likely to end up in deep frustration and disappointment.  On the other hand, if you give yourself too small of a challenge then you may find yourself becoming bored and unmotivated.  The importance of finding the right challenges for you is critical.

The right challenge is neither too easy as to incite boredom, nor too hard as to evoke relentless frustration.  It usually allows you to either build upon your preexisting skills, or learn new ones.  A good challenge is something you should be able to take pride in completing.

Getting the most out of a challenge
One of the primary purposes of putting yourself through a challenge is to receive the potential rewards for having completed it.  A good challenge should give you at least some kind of reward whether it be in increased skills, material gain, or just plain fun.  If it is a challenge is to be worth your efforts, then you should be able to gain something from it.

The things you gain from a challenge can vary greatly depending on how you actually work towards completing that challenge.  For example, if your challenge is to complete a particular task in order to receive some reward, then you can reasonable assume that the reward for the challenge is the reward you will receive when the task is complete.  While this is true, there are many more rewards you can potentially receive other than the big payout.

Sometimes the things you gain along your journey are worth just as much and sometimes even more than the final reward.  It could be that during your task you may have the opportunity to increase a particular skill, or build a better relationship with someone you care about.  Both of these things aren’t related to the final payout, but both can be greatly beneficial.