Two Ways To Improve Your Relationship With Money

Goal

This week, I discuss how to refine your relationship with money.

Table of Contents

• Understanding the Value of Money
• Why Do We Have a Negative Relationship with Money?
  • 1. Government’s Role in Monetary Devaluation
    • Inflation Is The Government’s Greatest Evil
  • 2. People overvalue and waste their money
    • We Cannot Buy virtue
• Two Ways To Improve Your Relationship With Money
  • 1. Eliminate your need for trinkets and luxuries
    • Resentment Is Borne From Wasted Money
      • Stop following the people and things that induce FOMO in you.
      • Look for cheap alternatives.
      • Set a clear budget but allow for certain luxury items.
      • Develop a firm purpose for your life.
  • 2. How to Invest Wisely and Improve Your Relationship with Money
    • Building Financial Independence through Smart Investments
      • You have to understand what you want to do with your life.
      • What items will help you become smarter, faster, and stronger?
      • Think about how often you will use whatever you wish to buy.
      • Are there things you can do to help virtuous individuals in your life or community?
• Money Can Help You Achieve Your Virtuous Ends
• Actionables
• Reading List

Understanding the Value of Money

“Money is the tool of men who have reached a high level of productivity and a long-range control over their lives. Money is not merely a tool of exchange: much more importantly, it is a tool of saving, which permits delayed consumption and buys time for future production.” – Ayn Rand

Money is “a current medium of exchange in the form of coins and banknotes.” There are many different forms of cash worldwide, such as Bitcoin, dollar, euro, peso, and yen.

Money is helpful because it creates a standardized system of value. Because of money, we know a car’s relative value to a hamburger.

Without money, we would have to rely on less ideal forms of trade, such as bartering. Banknotes allow us to universalize trade, making our economies more efficient and direct.

However, despite the cash’s usefulness, most people have a negative relationship with it. Why is that?

Why Do We Have a Negative Relationship with Money?

Money can be your master or your tool. Your choice.

There are two primary reasons why people have a negative view of money:

1. The government debases our monetary supply
2. People overvalue and waste their finances

A love of greed corrupts money. Let’s take a moment to examine both of these points.

1. Government’s Role in Monetary Devaluation

“I have never understood why it is ‘greed’ to want to keep the money you have earned but not greed to want to take somebody else’s money.” – Thomas Sowell

Throughout human history, money has primarily come from one source: the state. The state prints or creates the money, giving the market the supply it needs to trade for goods and services.

However, cash is a tool like anything else. When overprinted relative to the supply of goods, the value of cash decreases. This is known as inflation. The government, the institution of violence and incompetence that it is, tends to overprint the monetary supply leading to massive inflation. No matter a nation’s time period, region, or cultural background, the government always excels in debasing capital.

Inflation Is The Government’s Greatest Evil

What does inflation do? Firstly, it causes your money to lose value. As inflation increase, your cash cannot buy as many resources as it used to. Thus, you become poorer.

In a sane society, cash would increase in value. Since our society is full of addicts who follow corrupt leaders, we cannot have a sane monetary policy. We need to print more money to pay for the unsustainable programs every voter clamors for.

When banknotes are devalued, society is devalued. Why save for the future if capital is losing value? And if you don’t have a culture of saving, why should you have kids or consider how current policies will affect the future?

A society of bad finances is a doomed society of short-term pleasures, especially when that society worships money.

2. People overvalue and waste their money

“The worst sin you can ever commit to yourself is to sit and wait for someone to give you money.” – Mac Duke

Money is essential in an over-regulated society of massive laws and government overreach. Everything from healthcare to food becomes more expensive because the government’s meddling makes it so. Thus, I understand why people are so obsessed with money.

Money can solve material needs but can’t resolve spiritual struggles. We need God, virtuous goals, community, and meaningful challenges to give ourselves deeper meaning. Why? Because we have to pursue whatever reduces our dependency on vice and forces our pursuit of virtue. By being virtuous, we shed the petty behaviors and attitudes that plague every man. And we do such shedding for the benefit of our most virtuous selves and other people.

We Cannot Buy virtue

Virtue cannot be purchased. You have to earn it through the shedding of comfort.

In short, we cannot buy our way to virtue. If money solved abstract, spiritual needs, our society would be cured of depression, violent tendencies, and nihilism.

Cash is important, but it can’t be the end; just a means to a virtuous end. We should have money to afford healthcare, but healthcare should come from exercise, proper sleep, and a good diet.

Money can be a corrupting influence, but it is a tool, like anything else. We can use it to better the lives of ourselves if we are willing to improve our relationship with it.

Two Ways To Improve Your Relationship With Money

Improving your relationship with money requires a change in mindset, a desire for authenticity, and the ability to invest your money in items that will elevate you.

If you can refine your relationship with money, your life will improve. You will see money as a tool for your enrichment, not an avenue for your destruction.

Let’s look at the two things you must do to improve your relationship with money.

1. Eliminate your need for trinkets and luxuries

Remember that you are not the elite. Stop trying to keep up with those who waste money on trinkets and envy.

People either squander their money on trinkets or luxury items. Both, overall, are wastes that create resentment in the individual.

There are so many pointless items you can buy. These knick-knacks will fill your home, cluttering your garage or basement. You worked, sacrificed, and sweated to purchase things that gather dust.

On the other end, people spend their cash on luxury items. These over-expensive goods include name-brand clothes, expensive cars, overly large homes, and other items that work just as well as cheaper alternatives. Such luxury items are bought to “keep up with the Joneses” and provoke envy.

Resentment Is Borne From Wasted Money

Money shouldn’t be used to buy distractions or items meant for bragging. When you use finances for these purposes, you’ve taken your precious time and invested in things that are beneath you.

However, there are four techniques you can use to decrease your impulse to spend money wastefully:

1. Stop following the people and things that induce FOMO in you. Don’t be friends with people who always have you chase money and status instead of virtue and personal power.
2. Look for cheap alternatives. For example, you can find name-brand, fancy clothes at the thrift store for a fraction of the price. Because of Goodwill, I look like I shop at Ralph Lauren.
3. Set a clear budget but allow for certain luxury items. For example, I love playing video games. I can purchase new games, but I rarely get to eat out or buy other luxury goods such as jewelry.
4. Develop a firm purpose for your life. When you have a clear purpose, you are less likely to distract yourself with trinkets and other useless items. The more firm your life’s purpose, the easier it is for you to avoid buying crap for the sake of it.

You can invest your finances in what matters when you reduce your spending.

2. How to Invest Wisely and Improve Your Relationship with Money

On the flip side of refusing to buy nonsense is using money to invest. Your money is a tool to make your life better. As Ayn Rand said, it cannot replace you as the driver. It can help you reach your virtuous ends, but it cannot be your end.

For example, I purchase web development classes on Udemy or new websites for various personal projects. I may buy a new hydroponic unit or a backup generator. These are things that aid in my independence.

Another example is thinking about the difference between luxury and utility. I built a home gym, an expensive endeavor, but now I can freely and quickly work out when needed. Before, completing a workout would take me 2 hours when I factored in travel time and equipment use. Now, I can do exercises just as effectively within 40 minutes in my basement.

The home gym was expensive, but it has a utility that saves me time, energy, and resources.

Building Financial Independence through Smart Investments

Money can build a better life, but it must be used smartly.

Proper investment requires a few things of you:

1. You have to understand what you want to do with your life. What are your anxieties? How can you become more independent? What needs to be replaced or upgraded that you frequently use?
2. What items will help you become smarter, faster, and stronger? Will a new computer double your work time? Will a home gym give you the freedom to exercise?
3. Think about how often you will use whatever you wish to buy. You want to avoid grabbing something on a whim. Think clearly: will this last? Does it have longevity? Will I need to keep replacing it?
4. Are there things you can do to help virtuous individuals in your life or community? Use your money to help others. Invest in their virtuous ends or spend money to entertain them. For example, I only eat out when I’m with other people, so I can enjoy good food and company.

Money Can Help You Achieve Your Virtuous Ends

Cash is useful. Similarly to capitalism, we need cash, a net good overall.

But we cannot let it be an idol we worship. Like many other things, cash is the tool by which we reach virtue. That being said, we have money to invest in the good, not simply pursue what is “fun.”

Enjoy a limited list of luxuries but take your capital and buy the things you need to make your life better: a humble home, a hydroponic unit, a new computer, a home gym, better food, and so on.

If you change your relationship with money, you will live a more fulfilling, prosperous life. You won’t hate this much-needed tool but see it as another arrow in your quiver for reaching the significant goals you have set for yourself.

Actionables

1. What do you think of capital? Do you feel you have a good or bad relationship with money?
2. What do you spend your finances on? Are you more inclined to waste capital or save it?
3. Do you have a budget? What does it look like? Do you find it helps you? Does it hinder your desire for stuff?
4. How can you earn more cash? What skills could you learn? What would be involved in learning new skills? How would such skills increase the money you have?

Reading List

• THE TOTAL MONEY MAKEOVER BY DAVE RAMSEY – Debt is dumb. As an individual, being debt-free will serve you by delivering the monetary resources you need to remain free and pursue your goals. If you need help in defeating any debt you have, Total Money Makeover will walk you through the steps needed to grow wealth and achieve financial security.

Please remember it’s important to do the actionables. You’re not on this earth to simply read but to do. To become an individual, you must act more than you consume.

*Image credit to Unsplash.