Before you can decide how to invest your money or how much to stash away, it’s important to ask yourself the fundamental question:
• Why care about money?
The answer is harder than you think.
The Usual Suspects:
Sure, you know you’re supposed to grow up and get a job. You know you have bills to pay, a car to buy, and a home to live in. But what if you are the type of person who is fine with a smaller house, an older car, and less material possessions? Would you then care about money the same way I do?
One of the worst things about having personal finance for a hobby is that everyone assumes you are greedy or vain. “All he ever thinks about is money so he can buy more stuff”. Unfortunately, for some people, that IS why they care about money. But not me.
Why I Care About Money:
I would say I like nice things just as much as the next person, but I also remember my roots enough to know when enough is enough. Believe me, I’m no Kardashian.
When I was a senior in high school, I got a big lesson in why it’s important to care about money. I was a straight “A” student and was accepted into some very nice colleges. I was extremely excited until my parents had to break the news to me:
• There was no way we were going to afford to send me away to a non-local college.
My parents truly did the best they could, but the simple fact was that there wasn’t going to be enough money for me to both move out and go to college. Not wanting to take out student loans, it was then that I had to make a strong commitment to work part-time as much as possible until I had enough cash to make up the difference.
And ever since then, money has represented something more powerful than material possessions:
• Money represents opportunities
What Kind of Opportunities?
Yes, for me, money represents the ability to open doors that I never could have opened before. Ask yourself if you could do the following to full potential without money:
• Not just buy a bigger house, but a safe one in a neighborhood where you don’t have to worry about your children playing outside?
• Not just buy a new car, but a reliable car that you can confidently transport your family in?
• Pay for unexpected medical expenses?
• Look forward to the possibility of retirement?
• Send your children to the best schools, universities, colleges, classes, etc.
• Donate to your favorite church, mission, passion, or good cause?
• Care for your parents who may need you in their elderly state?
• Get life insurance (or any insurance at all) for your loved ones so they would be in good hands in case you were to surprisingly and suddenly pass away?
• The chance for you and your family to see and experience other parts of the world?
• To be able to leave something behind for your loved ones or a special cause after you are gone?
• Experience an overall higher standard of living?
Sure you may argue that you could accomplish all of things at any stage in your life. But I would argue that having money would make each of these opportunities much easier to manage.
Making Things Happen:
When you read this blog and think about what your goals are for investing, don’t limit yourself to just wanting a new car, bigger house, or new “whatever”. Think about all the things you could make come true for yourself, your loved ones, and the causes you believe in.
Life was meant to be lived, and in many situations it takes money to make that happen. Simply saving your money without a purpose is nonsense. When you save, make sure it’s for the right reasons.
* This post was originally published on 1/02/2012.
3) Let Curiosity Guide You, But Common Sense Protect You
Photo Credit: Money by Sh4rp_i, on Flickr
Daisy @ Add Vodka says
Money definitely represents opportunities for me, too. I was able to put myself through college, become independent, travel a very small amount, and enjoy myself with money. College made it so I make more money, which I will use for other awesome things 🙂
To some extent, I feel like experiences such as this help you to have a deeper appreciation of why money is important. Keep up the good work!
Modest Money says
I used to think about money just for the material things it could buy and how it could just ease your mind. Something changed over the years though. I started to think more long term and realized how satisfying things would be with more money. It really was a lot of the stuff you mentioned on that list. That’s the kind of stuff that can bring true happiness.
I agree. I used to think big houses and fancy things would do the trick. But as I get older, the ability to take care of those I love becomes more important.
John @ Married (with Debt) says
Money is a way to get me to the point where I don’t need money. Guess that is a strange way to look at it. It’s not a means to buy nice things, but to buy my freedom from wage slavery.
As strange as that sounds, your statement is 100% correct! You and I both on that path where our money makes enough income to take care of ourselves so we don’t need to worry about it anymore.
Justin @ The Family Finances says
I agree that money equals opportunity. I grew up in a poor family. My parents couldn’t afford to provide us with many opportunities, though they did what they could. Money and connections open doors that otherwise would be locked. I remember a friend from college who came from a very wealthy family (generational wealth, not simply rich parents). I was always amazed at the opportunities he had simply because he had money and knew so many people in high places.
I had those kinds of friends too and was always very envious. I wanted to create those same opportunities for myself even though I knew it was going to be a little more difficult. And good job touching on another point – who you know also makes a different.
Anthony Thompson says
Personally, I think that money represents liberty. Many would agree that having enough money to pay bills and live comfortably is not enough. Most of us want as much money to allow us to come and go whenever we want, and buy things regardless of the price. To me, that would be freedom.
That’s a good way to look at it and phrase it. Liberty …
TB at BlueCollarWorkman says
Yeah, opportunities. I really don’t want bigger, neater things; I just want food to eat and my family around. That’s pretty much it. So money provides us with food and the ability for my wife to not have to work so we can spend more time together. For the future, it will allow us to retire and have food on the table and time to spend together. 🙂
Is there really anything better than a roof over your family member’s heads and food on the table? I look to early retirement to be able to spend more time with my own family.
Andy Hough says
My wants are pretty simple. Looking at money for the opportunities it can provide me is a better way for me to think about money.
It becomes less of a negative and more of a positive when you put it in this light. When you realize all the good you could do for others, making more money takes on a whole new meaning.
For me money opens up a different world of people I have access to, and not just because I have money. Because I value money and live like I value money, others in that world are open to me.
Good point. This perspective breeds connection with other like-minded individuals who will only help you along.
Joe Morgan says
Money is freedom.
When I was living paycheck to paycheck and only making minimum credit card payments I felt like I was on a financial treadmill – working more just to keep up with my spending (or past spending).
Since I had my financial awakening and got my house in order, I have much more freedom about where I choose to work, or where to go on vacation or even just buy something and not feel guilty about it.
It also lets me sleep better at night because I’m not worried about what’s around the next bend.
So, I think Money = Freedom & Opportunity & Security.
Marissa @ Thirty Six Months says
Money represents a certain type freedom to be able to enjoy the things that are important to me, and I am passionate about. We live once and spend a majority working to get enough money to survive that we put our passions on the back burner.
I had so many friends in that situation for college. Friends with cds and video games and fancy clothing and trips to Disney World and often even new cars.
We didn’t have much stuff growing up, not even a clothes dryer or dishwasher, but it was worth it when I got to go to the college of my choice. Education was *the* priority, and they started saving for it before I was born. Compound interest really does work, even if it’s just the cost of a stereo set. Little things add up.