Have a Personal Money Philosophy
A personal money philosophy? Some people believe they just
need more of it, that they don't need to think about money and
it's meaning in their lives. But having more can cause problems
faster than it solves them if you don't know how to use money
and yes, even how to think about it.
Julie thought she just needed to make about 20% more income
than she was making, and everything would be better. After all,
she could almost pay her bills on time, and she had almost
enough income to live how she wanted. A little bit more and she
wouldn't feel so stressed out about things.
Three years, a promotion at work, and two raises later, she
was making 50% more than she used to make. She had a better apartment,
and new furniture. It was more fun now to entertain her friends
in her nicer home. She was proud of how much she had "progressed."
She was even less stressed. Oh, it was true that she had more
debt than ever, with payments on furniture and other things.
But she had enough income to handle it, as long as she had her
job. Since her job seemed secure, she didn't worry nearly as
much as she used to about financial matters.
Unfortunately, Julie hated her job. She knew it was a "good"
one by other people's standards, but she had never really enjoyed
working in an office, and it had been years since she been on
an archeological dig. That had been her passion before. She loved
the long hours outside, the discovery of relics and the mental
excise of trying to create a story from bits of past cultures.
She sometimes thought about returning to archeology, but she
quickly decided she couldn't. The work available wouldn't pay
nearly enough. It was too difficult to imagine cutting her income
One day she ran into a friend she hadn't seen in years. The
friend excitedly told her about an excavation he was working
on in the desert canyons of Arizona. They talked for a while,
and though Julie was happy to see her friend, she felt very tired
and sad when she arrived home that evening.
"What am I making this money for?" she asked herself.
She looked around the room at her nice things, and thought about
her new car with its large payments. Is this what she really
valued? Is this why she made a good income? There was nothing
wrong with any of it - except it wasn't her. It took almost two
years to extract herself from the "nice life" she had
bought, but she happily traded it all for a small RV parked in
the desert, and a new job assisting an archeologist.
Getting Poorer With Money
I worked at a casino on a small Indian reservation earlier
in my life. At some point in the development of the business,
it was decided that each tribal member would get a share of the
profits. This was in the form of a payment once per year, sometimes
as high as $10,000.
Now, it would be natural to assume that this would improve
the financial situation of the recipients, and it did for some.
What was shocking is how much worse off many were because of
this "free" money. I'll give a quick example.
Ben (not his real name) was always generous with friends,
even loaning out his last $20 when asked. He commonly said "money's
not important," and seemed to live according to that belief.
Of course, he was always "on the edge" financially.
He rarely even had enough money for gasoline, to go visit his
children who lived with their mother in another town.
Then came his $8,000 profit distribution. He bought a car
with $3,000 down. It cost $12,000 after trading in his old truck,
with payments of $300 per month. He went out and had a good time,
paid off delinquent bills, and bought gifts for his kids. He
got all new rent-to-own furniture, which after down payments
cost him $280 per month. He bought a cell phone, adding another
$50 per month to his expenses.
He was out of money in two weeks. The problem was that he
had the same income as he did before the distribution, but now
he had $630 more in monthly obligations. Of course it wasn't
long before his car was repossessed, leaving him with no transportation.
The new furniture went shortly after that. Within six months,
he was poorer than he ever was, thanks to that easy $8,000.
Many years ago I had a job repossessing autos after the owners
stopped making payments. One night we had to sneak into a woman's
yard to take her Cadillac. Looking over the information sheet
on the way there, we were shocked to see that she had won a million
dollars in the lottery just two years earlier. The moral of this
true story? If you don't know how to think about money, you won't
know how to use it.
Money tends to magnify one's character traits. If you get
into trouble because of the money you have now, you'll
likely get into even more when your income rises. If you have
an addictive personality, money can make the results even worse.
You have to understand (and prepare for) how you interact with
money if you want more of it to actually help you.
Money Philosophy - Two Thoughts:
1. Money is more important than most people think it is.
2. Money is less valuable than most people think it is.
These two thoughts may seem contradictory, but they are not.
Value is not the same as importance. The over-valuing of money
for its own sake can be seen clearly in the first story above,
where it takes years for Julie to ask "What am I making
Under-rating the importance of money is clear in the second
story. Ben is so casual about money that even when he received
a windfall, it only impoverished him more. As a result of his
money philosophy, he is even less able to do things that presumably
are important to him, like visit his children.
Those who believe money isn't important (as opposed to those
who just say it) are not paying attention. It plays a crucial
role in all areas of life now, whether one likes that fact or
not. If you care about anyone, you have to care about money in
today's world. It is what buys medicines, food, clothing, books,
churches, and free time to ponder the cosmos or the beauty of
a rose (we had to spend a lot time just on survival tasks in
Money Philosophy Questions
Here are some questions to ask in developing your own money
1. Beyond basic survival, what purpose do you choose for money?
2. What six things do you value most, and how can money help
with those goals?
3. Are you using money now to work for those values, and if
not, how can you change?
4. Have you read any books on managing money, and if not,
5. Do you make money in ways that fit with your moral and
6. Have "windfalls" (like tax refunds) in the past
helped you achieve important goals?
7. Does the idea of making money make you feel guilty?
8. Are there other ideas you have about money that get in
the way of making more?
9. What are you going to do to change how you relate to money?
10. Do you see money as "something to get" or as
something you create?
For more thoughts on money and philosophy, see the website
TheMeaningOfMoney.com, and especially the page Thinking